THE
Nigerian National Petroleum Corporation (NNPC) is currently spending
the sum of N1.16 billion to subsidise 10 million litres daily
consumption of kerosene in the country.Speaking during an interview with a television station on Saturday, the acting Group General Manager, Public Affairs, NNPC, Dr Omar Farouk Ibrahim, admitted that the NNPC sold kerosene at N40.90k per litre, though the marketers were selling at between N120 and N130 per litre to the Nigerian public.
“We have not received a directive or instruction saying that we should stop selling kerosene at N40.90k per litre.
“We have been making claims for kerosene subsidies as far back as 2009. To say that there was no claim is wrong. As far as we are concerned, there is subsidy on kerosene. If you go to any NNPC mega station, you will not buy kerosene more than N50,” he said.
The pricing template of Petroleum Products Pricing Regulatory Agency (PPPRA) revealed that total cost of importing and distributing kerosene is N156.46 per litre.
The breakdown of the cost of importing kerosene, according to the PPPRA website, is as follows: Cost and Freight (C+F) –N130.47; lightering expenses –N4.09; NPA charges –N0.68; financing –N0.64; Jetty depot thru’put charge-N0.80; Storage charge –N3.00; retailers’ margin –N4.60; transporters’ margin –N2.99; dealers’ margin –N1.75; bridging fund –N5.85; marine transport average –N0.15 and administrative charges –N0.15, all totalling N156.46 per litre.
The NNPC also put daily consumption figure for kerosene at 10 million litres per day, while about 30 million litres of Premium Motor Spirit (PMS), otherwise called petrol, is consumed daily.
Assuming the figures were correct, subtracting N40.9k from N156.46k gives N116.46k as subsidy claimed by the NNPC per litre of kerosene and multiplying by 10 million litres daily gives N1.16 billion subsidy claim on kerosene on a daily basis.
The Group Executive Director, Finance and Accounts Directorate, NNPC, Mr Bernard Otti, had explained that NNPC used the fund to pay itself subsidies on kerosene and petrol which amounted to $8.49 billion.
Based on the revelation, the NNPC may be spending over N425 billion annually as subsidies on kerosene alone.
Meanwhile, there are strong indications that some marketers in the downstream sub-sector of the Nigerian oil and gas sector have been engaging in sharp practices along the kerosene distribution value chain.
The action has led to several fraudulent subsidy claims on kerosene, running into billions of dollars, according to investigation by the Nigerian Tribune.
The NNPC is the sole importer of HouseHold Kerosene (HHK), otherwise called kerosene, as it currently imports the product at N156.46k per litre and sells to portfolio marketers, mostly politicians, at N40.90k per litre.
Investigation further revealed that allocations to lift kerosene at N40.90k was usually given to portfolio marketers with no filling stations, depot or storage means to store the products.
The said marketer would sell the allocation to lift kerosene at between N90 and N95 per litre to successful marketers, who would take the document to any NNPC depot for loading.
The successful marketers eventually sell to the final product to consumers at between N120 and N130 per litre, depending on location.
Moreover, on each truck of 33,000 litres of kerosene, the portfolio marketers make between N1,620,000 per truck if sold at N90 per litre and N1,785,300 when sold at N95 per litre.
Another means by which marketers make quick gains is by targeting large scale consumers like the engineering and construction firms and selling the products directly to them at huge discounts.
Investigations also pointed to the aviation sector, where some marketers allegedly divert kerosene for usage as aviation fuel.
However, an industry source, who pleaded anonymity, told the Nigerian Tribune on Sunday that at present, the practice is almost impossible.
According to him, “we used to have such practice in the past, but it is very difficult to divert kerosene as aviation fuel. This is because aviation fuel used in aviation sector is now traceable.
“Authority can now trace aviation fuel bought and used by any aircraft to its origin. The sanction against anybody caught in the act is heavy.”
The idea to sustain subsidising kerosene to ensure that the masses could buy at affordable prices has been defeated, because most household consumers buy at above N110 per litre.
Several schemes like the NNPC/AP kerosene direct sales, NNPC/Capital Oil Kero-Direct and now NNPC/IPMAN Kero-Direct schemes have been enmeshed in corruption.
Unremitted $20bn: Sanusi will be exposed on Thursday –NNPC
The Senate Committee on Finance investigating the alleged missing $49.8 billion will be explosive on Thursday, as the NNPC vows to expose all lies being brandished by the Central Bank of Nigeria (CBN) governor, Mallam Lamido Sanusi on the alleged missing fund.
NNPC Group Executive Director, Exploration and Production, Mr Abiye Membere, disclosed this while briefing journalists, in Abuja.
Membere said he ws happy that the joint press briefing involving Sanusi, the Minister of Petroleum, Mrs Diezani Allison-Madueke; Accountant General of the Federation, Mr Niyi Otunla and the NNPC Group Managing Director, Mr Andrew Yakubu, addressed by the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, had already reconciled substantial part of the $49.8 billion which Sanusi claimed was missing in the letter he wrote to the presidency.
At the joint press briefing, Membere said only $10.8 billion was yet to be reconciled, wondering how the apex bank’s boss would now come up with higher figure of $20 billion at the Senate hearing.
“The CBN keeps on changing number. They started from $49 billion, later reduced to $10.8 billion. NNPC took time to explain how the $10.8 billion was utilised or expended, but we were taken aback on Tuesday when the number changed from $10.8 to $20 billion,” he said.
Assuring the public that all the lies of Sanusi would be exposed on Thursday at the Senate hearing, Membere said the corporation had vital documents which would be tendered, with a view to exonerating the NNPC over the allegation.
He said it was unfortunate that Sanusi was now holding on to the same disputed figures prior to the reconciliation exercise to tarnish the NNPC image, even when there had been no new development since the December joint press briefing.
Membere said the NNPC had been vindicated by the CBN’s figure of $65 billion total and receipt of about $15 billion, which translated to $49.8 billion that Mallam Sanusi said was missing in his letter to the presidency.
However, he said the corporation informed Sanusi that the gross revenue for the period was not $65 billion but $67 billion, adding that “we have documentation to show that over $48 billion or $49 billion had been accounted for.
“If you subtract $10.8 billion from $67 billion, about $50 billion has been accounted for, which the governor, the finance minister, Budget DG, accountant general, petroleum minister, all of us at that December meeting agreed with.”
He said at the Senate appearance, NNPC stressed that $10.8 billion was not missing, adding that “we explained that the $10.8 billion was made up of subsidy claim, operational cost, the cost of maintenance of the facilities that we have. In addition to that, NNPC maintains a strategic stock of product for this country. The 22 depots in the country have over 40 days’ products supply capacity if they are functional, but we cannot rely on them, because of oil theft and pipelines vandalism.”
Membere said the directive after the joint press briefing was to go and reconcile and come back, adding that “we have been working with relevant agency, the budget office and PPPRA until last week Tuesday when he [Sanusi] brandished new figure.”
On kerosene, he said the NNPC was the sole importer as no other independent marketer accepted to import the product, because, “at that time, if you take off subsidy, the price of kerosene will be higher than that of the Premium Motor Sprits [PMS].”
Stating that the NNPC bought kerosene at N150 and sold at N40 per litre, Mr Membere asked where the CBN expected the NNPC to get the money to fund kerosene subsidy.
Though he said the public may be paying above the regulated price for kerosene in other filling stations, the product, according to him, was sold at N50 per litre in all NNPC retail outlets nationwide.
EFCC steps in
Heads of the NNPC, CBN and Ministry of Finance may soon start having chats with the Economic and Financial Crimes Commission (EFCC) over the controversial missing $20 billion oil money.
It was learnt that a petition on the alleged missing money was being primed for detailed investigation by the commission.
The petition to probe the missing money, written by a rights group, Socio-Economic Rights and Accountability Project (SERAP), was received at the commission last week Friday.
A source disclosed that the petition would be treated accordingly, adding that all parties mentioned in the allegation would be quizzed.
Calls to mobile line of the spokesperson of the commission, Wilson Uwujaren, rang out.
SERAP had, in a statement on Sunday, said it petitioned the commission to “urgently begin a thorough, transparent and effective investigation into allegations that $20 billion oil money is missing from the account of the NNPC.”
It noted that the petition was borne out of the allegation last week by Sanusi that “NNPC is operating a racket through which the federation has been losing billions.”
SERAP, in a petition dated February 7, 2014 and signed by its Executive Director, Adetokunbo Mumuni, said “we are concerned about the lack of accountability of the NNPC, which is not consistent with the attitude of a government establishment funded with tax payers’ money.
“This lack of accountability partly explains why ordinary Nigerians do not trust the NNPC to deal with corruption within its systems. The NNPC will need to come clean with the Nigerian people if it is to enjoy their trust and confidence.”
It urged EFCC to “ask the NNPC to reveal information about the systems it has established to prevent public money from being stolen or to recover the missing oil money,” adding that “it is very important that the EFCC sends a strong message that it is willing and able to step up its efforts to detect, investigate and prosecute cases of corruption.”
Alleged missing money: Disquiet at CBN
The last may not have been heard over the alleged missing of billions of dollars in the NNPC, as top management staff of the apex bank were said to be at war with Sanusi over his latest claim that the NNPC was still holding on to $20 billion meant for the Federation Account from 2012 till date.
Nigerian Tribune gathered that the bank’s top staff were said to have accused Sanusi of unguarded, inconsistent and un-coordinated utterances on oil revenue in the recent time.
A top source at the bank told the Nigerian Tribune in Abuja, at the weekend, that the top management staff were angry that the governor neither informed nor discussed with them what he presented before the Senate Committee on Finance at the ongoing probe of the alleged missing oil revenues.
They also accused the CBN governor that they were not privy to the letter he wrote to President Goodluck Jonathan on the alleged $49 billion missing oil revenue.
The source said the inconsistencies in Sanusi’s statement were embarrassing because “he wrote to the president that $49 billion oil revenue was missing, told the Finance Minister after a reconciliation meeting that the figure is $12 billion, now he is claiming it is $20 billion.”
Nigerian Tribune investigations revealed the top staff reportedly told Sanusi at a meeting last week, after his appearance before the Senate, that he ought to have learnt from the September 11, 2011 seminar which the NNPC management organised essentially for the CBN officials at the NNPC corporate headquarters, Abuja, on understanding oil revenues rather than playing to the gallery as he did.
The source revealed that Sanusi’s latest outburst came at a critical time when President Jonathan was considering picking one of the deputy governors as successor to Sanusi.
“For now, I can tell you that top management staff are not at peace with Sanusi because of the latest development.
“The president is said to be considering one of them as Sanusi’s successor, but with this, the president may change his mind. It seems they are not working as a team and, as well, not conversant with the operations of the nation’s apex bank,” the source added.
Efforts to get the reaction of the Director of Public Communications in the CBN, Mr Ugochukwu Okoroafor, on the situation at the apex bank were unsuccessful, however, a top official of the bank told the Nigerian Tribune in confidence that all was not well for now in the bank over the conflicting figures being dished out by the CBN boss on the alleged missing oil money.
He said the ministries of Finance and Petroleum Resources, as well as the Presidency “are on the top of the situation,” in order to save the country from embarrassment.
Sanusi inciting public against PDP –Babatope
A former Transport and Aviation Minister, Chief Ebenezer Babatope, at the weekend, accused Mallam Sanusi of trying to incite members of the public, especially the opposition, against the Peoples Democratic Party (PDP)-led administration of President Goodluck Jonathan through his reckless and inconsistent statements on the alleged missing money at the NNPC.
He lamented that within few weeks, Mallam Sanusi had quoted three different figures as the amount involved.
Speaking with newsmen in Abuja at the weekend, Chief Babatope, a member of the Board of Trustees (BOT) of the PDP, disclosed that if not that Sanusi would be leaving office in a few months, it would not be out of order to press for his outright sack, since he had exposed himself as somebody not capable to hold such a sensitive office.
According to him, “it’s disheartening and highly embarrassing for the CBN governor to be contradicting himself like that.
“Look at how he was raking before the Senate few days ago that the actual money that was missing was $20 billion, the same man had initially quoted different figures of $49 and $12 billion respectively.”
“Trust Nigerians, they are very sensitive and very articulated when it comes to money. Imagine the CBN boss coming out to say a whopping sum of $49 billion was missing in a government agency like NNPC. People will ask questions.
“They will even come to conclusion that it is PDP-led government that stole the money for elections, just imagine, some people will instigate innocent Nigerians to take to the streets based on false information.”
Chief Babatope, while advising Sanusi to stop raising false alarm in national interest, urged Nigerians to ignore the seeming unguarded statements that could throw the entire nation to another round of crisis, which would later turn out to be false.
Senator Emmanuel Anosike also described Sanusi’s statements on oil revenues as unfortunate and misleading, saying it should disregarded in its entirety.
Anosike, a former chairman of the Senate Committee on Services, said Sanusi was on a mission to unsettle the administration of President Jonathan.
At a news conference in Abuja, Anosike said it was saddening for Sanusi, who recanted his earlier statement that NNPC had not remitted $49 billion, to now said it’s $20 billion.
An economist, Dr Jide Aluko, said the CBN governor was preoccupied these days with false alarm on oil revenues, while allowing the nation’s monetary policies under his watch to weaken.
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