Mega-Corruption in the fuel subsidy regime

One of the most shocking statements from the Presidency in recent times was the declaration that there

would be no change of ministers as the President is satisfied with their work. Given numerous revelations about mega corruption in recent times, the statement can only be read as an open endorsement of massive looting. Following the publication of the report of the House of Commit- tee on the Fuel Subsidy mega looting, Nigerians discovered that their suspicions were true, there has been monumental unprecedented level of fraud in the subsidy regime. It was in this context that N-Katalyst, a non-partisan network of individuals organised a National Symposium in Abuja to address the issues.

The House report had showed contradictions in reported fuel subsidy payments – “contrary to the earlier official figure of subsidy payment of N1.3 trillion, the Accountant General of the Federation put forward a figure of N1.6 Trillion, the CBN N1.7 trillion, while the Committee established subsidy payment of N2,59 trillion as at 31st December, 2011, an amount more than 900 percent over the appropriated sum of N245 billion.” In addition, there are “out- standing claims by NNPC and the marketers in excess of N270 billion as subsidy payments for 2011.”

Following a review of totally incomprehensible and contradictory presentations by Governmental ministries, departments and agencies, the Committee was able to make a credible estimate that the probable daily consumption of petrol from the record of marketers and NNPC comes to an average of 31.5 million litres daily. It, therefore, proposed the continuation of subsidy for Petrol and Kerosene and suggested a budget of N806.766 Billion for the 2012 fiscal year. The Committee asserted that the 445,000 bpd allocation to NNPC is sufficient to provide the Nation with its needs in petrol and kerosene, with proper management and efficiency. The Committee recommended the refund to the treasury of the sum of N1, 06 trillion for various violations.

It is clear that fuel subsidy corruption has revealed a new trend of corruption in Nigeria. In the

past, corrupt transactions took place mainly through contract inflation, over- invoicing and receiving of kick- backs. But the fuel subsidy corruption has witnessed situations whereby people collect subsidy payments without making any supplies, collect foreign exchange without supplying petrol and collect subsidy payments for not supplying petrol having collected foreign exchange for the purpose. The fuel subsidy probe presents a supreme opportunity for the people of Nigeria to be united in the determination to rescue our country from the stranglehold of thieves. N-Kalalyst believes that the monumental corruption unveiled by the investigation should be turned into an opportunity to create a tipping point in which transparency trans- forms into accountability. It is clear that public corruption has run out of control. We are recent witnesses to the police pension scam and the unbelievable spectacle in the House of Representatives on the power probe where it was discovered that over $16bn was spent to provide electric power without commensurate results. We are looking at a pattern of organised looting of our national resources emanating from the Executive Branch. It continues because Nigerians do not stand up to fight and hold their leaders accountable for their actions. It will not be enough to insist that the culprits be prosecuted and punished. We must begin this fight by demanding the following.

The Jonathan Administration must ensure that all persons and institutions proven to

have been indicted in the fuel subsidy scam should be punished. These include, but are not limited to, the Ministers of Petroleum Resources and Finance, the Board Members, MD and Management of NNPC, the Board Members and Executive Secretary of PPPRA, the Director of DPR

and all public officials indicted in the Report by the House of Reps Ad hoc Committee.

The freezing of the accounts and recovery of all illegal payments made to the Petroleum marketing firms, the NNPC, PPPRA and others which, according to the House Report, amount to N1.2 trn or $6bn. The immediate dismissal of the Minister of Petroleum Resources, Diezani Alison-Madueke is necessary as she awaits prosecution for her crimes against the Nigerian people.

The import of the House Report is that there is a breakdown of our public finance system. We have all seen the difficulty of Government in proving the monthly allocations to states and local governments. There are even challenges paying youth corps members their allowances. We must begin to pose the question whether Nigeria is broke due mainly to unprecedented looting of our treasury. As the subsidy racquet continues, it appears that the 888 billion provided for fuel subsidy in the 2012 Appropriation Act has already been spent. The money in the Excess Crude Account left behind by the Obasanjo Administration has been almost completely depleted. If accountability does not return to the agenda, our governance system will collapse completely he spectacular failure of recent high profile criminal prosecutions relating to corruption dramatizes the collapse of the system of public prosecution in Nigeria. Public prosecution rests on a tripod – the detection and investigation of crime, the prosecution of offenders and the conviction and punishment. All levels are in crisis due to the appointment of successive Attorney Generals who see themselves as the President’s poodle rather than an independent and impartial officer of the State deter- mined to advance the cause of justice. There is no political will at the very highest echelons of authority to fight corruption in the country. Already, the Attorney-General of the Federation and Minister of Justice, Mohammed Adoke (SAN), has described the report as mere “fact finding” while the Political Adviser to President Goodluck Ebele Jonathan, Alhaji Ali Gullak, described it as lacking credibility.

While we are conscious of the fact that government must be guided by the dictates of the rule of law and due process, the message we get from the Presidency is that they are in no hurry to identify and prosecute the culprits of this mega corruption. A campaign is necessary to compel the President to come out openly and show commitment to ending impunity. The first step in this regard is to immediately terminate the appointment of the Attorney General, Mohammed Adoke, SAN and appoint a credible Attorney General who has the skills and the will to combat and prosecute corruption. The President should also announce a time frame, not exceeding six months, for implementing the Farouk Lawan Committee report and commencing the prosecution of all indicted officials and all persons who benefitted, colluded or participated in the corruption scandal.

The structural conditions which allowed for the monumental fraud is that NNPC remains as the regulator, main producer and marketer of petroleum and its products, both upstream and downstream. It is a clear conflict of interest that allowed the organisation to become a behemoth with no respect for laws and processes. There is a need for deregulation so as to stop NNPC from regulating the downstream sector. Oil Minister Diezani Alison- Madueke has a conflict of interest by being both on the board of NNPC – a fuel importer – and the supervisor of the subsidy regulator, the Petroleum Products Pricing and Regulatory Agency (PPPRA).