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Home Business Business News Farouk Lawan subsidy report: NNPC, oil stakeholders kick, as Tambuwal shun intimidation

Farouk Lawan subsidy report: NNPC, oil stakeholders kick, as Tambuwal shun intimidation

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By Abdulwahab Isa

A motion moved on the floor of the Senate last year by Senator Bukola Saraki, immediate past governor of Kwara state could be the road map bailing Nigeria of mis-management of her natural resources.
A top ranking member of the ruling Peoples Democratic Party (PDP), Saraki’s motion had stirred the nest divulging that oil subsidy financing in 2011 budget overshot its limit of N245 billion to over N1 trillion.
Given the tempers, tension and emotions Saraki’s singular motion has generated culminating to the setting up of the Farouk Lawal probe committee in the House of Representatives.
The stage for what is now known Farouk Lawal fuel probe was triggered by the removal of subsidy on Premium Motor Spirit (PMS) by the federal government on January 1, 2012. That singular action, threw up wide scale protest and public outcry. To manage the huge crises that trailed subsidy removal which hiked fuel pump price from N65 per liter to N141, government restored partial subsidy.
Subsequently, the House of Representatives set up an adhoc committee to probe the subsidy regime and the process of its implementation by the various relevant parties. Crucial to Farouk Lawal committee term of references include, verifying and determining the actual subsidy requirements and monitoring the implementation of the subsidy regime in Nigeria.
In turns, the committee invited top government officers, oil firms and agencies connected to oil subsidy for testimonies. It was tension soaked affairs while it lasted.
Eventually, the committee submitted its report last week proclaiming a nerve - cracking figure of about N1.7 trillion which it said it uncovered to have been spent on fuel subsidy. It recommended refunds.
Some of its recommendations include: NNPC to refund N704 billion PPPRA, N312 billion, 18 companies that failed to appear are to refund N41.90 billion while marketers will refund N8.664 billion. The NNPC is to further refund the N466b and N6b it owed the Nigerian Customs and NPA respectively.
The committee further recommended that all the Executive Secretaries of PPPRA who served between 2009 and 2011 be prosecuted while indicted officials of the offices of Accountant General of the Federation, Budget Office and the ministry of finance are to be sanctioned in line with civil service rules. It called for the unbundling and overhaul of the NNPC as well as the re-organization of the ministry of petroleum resources.
Expectedly, the report is steeped with controversies as organizations, agencies and oil firms indicted have taken media space to denounce the report they say is a witch-hunt.
The Nigerian National Petroleum Corporation (NNPC) for instance categorically denied ever receiving a total sum of N1.329 trillion as subsidy payments over three years (2009-2011) from the Central bank of Nigeria as alleged by Farouk Lawal ad-hoc committee on subsidy regime.
In faulting the committee’s claim, NNPC clarified that subsidy payments are not based on cash remittance and therefore, CBN could not have remitted any cash to NNPC for the purpose of subsidy. The corporation in a statement said the mechanism of subsidy recovery by NNPC is non-cash based, but by way of credit to NNPC against domestic crude cost due.
“When approvals certificates are received from Petroleum Products Pricing Regulatory Agency (PPPRA) their values are deducted from crude oil cost due in a given month after due consideration of what is approved”, it explained.
The NNPC management in its response to the report of the ad-hoc committee notes that while its GMD has highest regard for the National Assembly by constantly honoring their invitations whenever summoned, it however observed that committee deviated from its Terms of References (ToR) which required it to verify and determined the actual subsidy requirements and monitor implementation of the subsidy regime in Nigeria.
“The committee had to determine subsidy applicable to the relevant petroleum products derivable from the 445,000 bpd allocated to the corporation, thereafter the committee was expected to determine the shortfall between the corporation portion and national consumption and apply subsidy to the shortfall so determined”, NNPC observed, adding that committee abandoned this critical mandate.
In batches, oil firms, PPRA and indicted institutions have taken pages in Newspapers to denounce the Farouk Lawal’s recommendations contained in the report.
Some unions in the oil and gas sector including the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), and Petroleum and natural Gas Senior Staff Association of Nigeria (PENGASSAN) had, in a joint statement kicked against the allegation leveled on NNPC.
As a follow-up, eighteen companies asked to refund over N41.9 billion, have hired a Senior Advocate of Nigeria (SAN), Chief Mike Ozekhome, to lead their legal battle against the House of Representatives and the House ad-hoc Committee on fuel subsidy.
But the House spokesman Zakari Mohammed said lawmakers will take the oil marketers to the court of public opinion. The House has, however begun the adoption of the ad-hoc committee recommendations.
With tension generated by the report Speaker of the House of Representatives, Aminu Waziri Tambuwal has declared that the House would not be intimidated by the antics of those indicted in the consideration of the reports of its investigations into the administration of the nation’s subsidy regime.
Tambuwal has warned of “no sacred cows” as the report is being considered.
He said “The probe of the oil Sector has raised so much dust from certain segments of the polity such that it became clear that the intention was to frustrate it. For those who regard the oil sector as a secret society or sacred cow, I wish to state without equivocation that it is not. All public agencies in the oil sector are the creation of Acts of the National Assembly and this Honourable
House has no powers to legislate for the creation of secret societies. Similarly all private sector corporate bodies operating in the sector are the creation of the Corporate Affairs Commission and that Commission also is not vested with any powers to incorporate secret societies. Let it therefore be known that in our drive to sanitize the polity, there are no sacred cows and we do not intend to discover any.”
However, recommendations contained in the report may be of no impact if Presidency finds no merit in Farouk Lawal report.

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