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Subsidy palaver: In search of reform in the oil industry

The minister, within a week, constituted two committees with different mandates. She also invited  an anti-graft agency,  the Economic and Financial Crimes Commission (EFCC), to…

The minister, within a week, constituted two committees with different mandates. She also invited  an anti-graft agency,  the Economic and Financial Crimes Commission (EFCC), to investigate allegations of fraud in the payment of subsidy to petroleum product importers. It is also to investigate the ministry and the Nigerian National Petroleum Corporation (NNPC) and drag anyone found wanting before the court. The objective of all these is to bring back hope to Nigerians that the ministry will soon be a place to be proud of.

The first committee inaugurated by the minister, was the special Petroleum Industry Bill (PIB)  Task Force and its technical committee. At the inauguration, the minister said, “we have listened to the voices of the people of Nigeria when, over the last few weeks, they spoke in unison for accelerated reforms in the Nigerian oil and gas industry. These reforms will anchor on the new Petroleum Industry Bill (PIB).”

The PIB Task Force headed by Senator Udoma Udo Udoma has the mandate to accelerate the passage of the bill. It has as members a vibrant activitist who has demonstrated adequate knowledge of what has been going on in the petroleum sector, the Trade Union Congress (TUC) President, Mr Peter Esele.  The minister charged the committee, that despite the challenges government faced in passing the PIB during the 6th National Assembly, this new team should   “renew our determination to work with the 7th National Assembly, under the steady and stable leadership of Senator David Mark and Aminu Tambuwal.”

Under the Task Force, there is also a technical committee, headed by the Director, Department of Petroleum Resources, Engineer Osten Olorunsola. The terms of reference of the two committees are to work together with the office of the Petroleum Minister and Minister of  Finance and the Attorney General of the Federation and Minister of Justice, to produce  a clean copy of the bill for presentation to the National Assembly.

The committees will also work with the National Assembly to facilitate a buy-in and quick passage of the PIB into law and consulting with all stakeholders to ensure industry, labour, civil society and media to support  the transformation of the petroleum industry.

The other committee set up by the minister is a special task force on governance and controls in the NNPC and other parastatals headed by  Mr Dotun Sulaiman.

This committee will review the management controls within NNPC and other parastatals, design a new corporate governance code for ensuring full transparency, good governance and global best practices in the NNPC and other parastatals among others.

In a statement she issued recently, the minister said the recent demonstrations and protests in the country, which demanded transparency and openness in the oil sector, it was clear that the Nigerian people are demanding improved accountability and transparency in the oil industry.

“Consequently, in keeping with the transparency and accountability policies of the Goodluck Ebele Jonathan administration, I have taken the following actions:

1.    With presidential approval, I have written to invite the EFCC to immediately review all payments made in respect of subsidies on PMS and kerosene and to take all necessary steps to prosecute any incidence of malfeasance, fraud, over-invoicing and related illegalities in an open and transparent manner.

2.    I have set up a unit within my office to be headed by an independent auditor to review the KPMG and other audit reports on NNPC and other parastatals and immediately begin implementation of their findings, ensuring, at all times, full probity and value for money.

3.    I am enpanelling another unit in my office to begin a comprehensive review of the management and controls within all parastatals in the ministry, including but not limited to NNPC, PPPRA and DPR.

She added that she expects “a report in 30 days to enable us take further actions in reforming, management, personnel and other practices and procedures in parastatals within the ministry.”

Allison-Madueke noted also that the reform process had already begun in PPPRA and DPR where management changes and reforms were beginning to yield  results. She said on this that, “I will be meeting with the Senate President and the Speaker of the House of Representatives in the coming week to seek their cooperation and leadership in the quick passage of the Petroleum Industry Bill so that we can anchor the comprehensive reform of the oil industry.”

The minister had assured Nigerians that all hands would be on deck to ensure full probity and accountability in the oil industry. “Having spent the last 18 months painstakingly reviewing its operations and designing a vision for the future, it is now time to deliver.”

Apparently, Nigerians are anxiously waiting for the reforms to materialize, as indications from the House of Representatives probe of the subsidy regime supported suspicions of massive fraud. As against the N1.3 trillion initially said to have been spent on subsidy without appropriation in 2011, last week, the House’s Ad hoc committee learnt that the subsidy was actually to the tune of N2 trillion. More damning is the KPMG audit report which threw up dozens of irregularities and abuse of procedures in the oil industry since 2007.

With this new initiative by the minister, it seems that some concerns by Nigerians about transparency and openness in the industry will be addressed. Some still are yet to be convinced that there will be reforms in the industry, unless something tangible is seen to have been done.  According to Barrister  Eze Onyekpere of the Centre for Social Justice, there is nothing like reforms in the ministry of petroleum resources.

He said, “personally, the first reform she should do is to resign, then all other investigations follow. But for now, there is no reform.”

Responding to the call for her resignation, Allision-Madueke had argued that the rot in the system had been there before she took over as Minister of Petroleum Resources and that what she intends to do was to demonstrate the political will to clean up the system. Saying she would not resign, Madueke argued that: “I think that all of us who put ourselves to public office should try to be very open to critics because without criticisms, we cannot access the truth and get it in the best positive way to use it in our positions and places in government.”

The ball is in the court of the EFCC and the committees set up to investigate and produce templates for transparency in the sector. Last week, the EFCC told Sunday Trust that it will do a great job. Nigerians hope they will not disappoint.