How NNPC fleeced Nigeria of N555bn, by RMAFC

  • Tuesday, August 14, 2007 - By YINKA FABOWALE, Lagos ISAAC ANUMIHE, Abuja
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What appears a bombshell exploded on President Umaru Yar’Adua at the weekend, with fresh revelation that the Nigerian National Petroleum Corporation (NNPC) fleeced the nation of a whooping N555 billion between December 2004 and April this year.

Chairman, Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Mr Hamman Tukur, who made the shocking disclosure during a courtesy call on the President at the Aso Rock Villa in Abuja, said the nation may have lost the huge sum from its federation account, due to lack of transparency and accountability which bedevilled the computation, procedure of payment and stakeholders involved with the fuel subsidy.

The report is coming on the heels of an expose in which top officials of the corporation, allegedly milked the nation’s cash cow of another N502 billion through various frauds including producing crude oil far in excess of assigned Organisation of Petroleum Exporting Countries (OPEC) quota and converting the proceeds to political electioneering and selfish ends.

Some two billion dollars were also said to have been diverted between United Kingdom and Bermuda in certain shady deals involving Nigerian officials.
Worsening the picture of the rot in the oil sector, the United States Justice Department also recently claimed that the US oil services company, Wilbros, bribed officials of the NNPC, the Peoples Democratic Party (PDP) and the Nigerian government millions of dollars in a bid to secure the $387 million Eastern Gas Gathering System project.

Funsho Kupolokun, until last Thursday the Group Managing Director of the corporation was sacked and replaced with Abubakar Yar’Adua, by the President on Friday.
There are speculations that Kupolokun could come under probe by the Economic and Financial Crimes Commission (EFCC) for sundry allegations of misdeeds, including award of contract to an oil firm in which he had interest.

But alarmed at the magnitude of the emerging sleaze, eminent Nigerians and groups have called for a full-scale audit of the corporation and probe of the alleged scams.
The opposition Action Congress (AC) in a statement issued in Abuja on Sunday by its National Publicity Secretary, Alhaji Lai Mohammed, said the handling of the allegations would be a litmus test for the Yar’Adua administration in its avowed commitment to the fight against corruption.

But former Petroleum Resources Minister, Professor Tam David-West, reacting to reports that the EFCC may go after Kupolokun for the wrong-doings at NNPC, said former President Olusegun Obasanjo should be arrested alongside the ex-GMD to answer questions on the mess in the oil ministry for the eight years he was the Petroleum Resources Minister.
His contention is that Obasanjo could not plead ignorance of the deals at the NNPC, which, he says, is coterminous with the oil ministry.

Addressing the president, during the courtesy call, the RMAFC boss, Tukur said: “Mr. President may be aware that the NNPC lifts 445,000 barrels of crude every day for domestic refining, but it sells most of these to refineries outside the country, auspiciously because our refineries are not operating at full capacity. NNPC pays for refining and collects all the refined products but Nigerians only see kerosene, PMS and diesel.

Where then are the other products? Revenues from the sales of the other products like black oil, LPFO should be enough to recover costs and save Nigerians from price increases. Mr. President, sir, not only does the NNPC not account for the other products, but it also withholds about N20billion every month from the federation account as subsidy.

“Mr. President, sir, the illegal deductions in the name of subsidy do not end with the NNPC. The Petroleum Products Pricing Regulatory Agency (PPPRA) is similarly paid money from the domestic excess crude account, based on calculated cost recoveries on petroleum products.”
In his submission, the RMAFC boss further said that the commission had raised query on how the PPPRA arrived at subsidy, especially as some items on its template are unnecessarily given high rates.

These rates, he listed to include exchange rate, dues paid to the Nigeria Ports Authority (NPA), pipelines/marine services charge, storage charge, and operational cost charge of PPPRA.
So far, he said, PPPRA had illegally deducted more than N23billion from the domestic excess crude between January and May 2007, adding that the controversy surrounding the management of external debts was compounded by the lukewarm attitude for keeping records of such debts, while inconsistency of records on repayment and servicing had remained a subject of dispute between the debt management office and the debtor states.

Tukur, however, advocated that all states should set up their debt management units to keep track of all transactions of loans and also to liaise adequately with related agencies such as the Debt Management Office (DMO),Federal Ministry of Finance(FMF), Office of Accountant General of the Federation(OAGF) as well as the RMAFC.

On the bribery allegation against the PDP, Federal Government and NNPC officials, the AC said it expected the EFCC to quickly swing into action to get to the root of the matter by exposing those involved.
“We can see a similarity between this case and the PTDF issue, since both originated in the US. Therefore, the EFCC must replicate the alacrity with which it handled the PTDF issue, even when it involved a sitting vice president.

“Within a short time, the EFCC churned out a report on the PTDF case, a government panel was set up to review the report and a white paper issued on it. The EFCC cannot claim not to have sufficient facts in this case, since the US Justice Department can assist in the investigations,” it said.

The party warned it would not allow a cover-up on the allegations, no matter who is involved, adding: “We are not accusing anyone here, we are only saying we need to know who took what bribe as alleged.”
“President Umaru Yar’Adua has raised the bar on the issue of transparency and no one can afford to lower it,” it said.
On the allegation that NNPC officials fleeced the country of billions of dollars, the AC said the investigation into the allegation must start with the audit of the NNPC accounts.

“This allegation is very serious indeed, considering that oil accounts for most of the country’s foreign exchange earnings. The complicity of officials of the NNPC and those of oil companies must be established, if any, and those found guilty brought to book to deter those who may want to toe their path in the future,” the party said.
AC said the fight against corruption cannot be said to have taken off without the probe of the activities of the NNPC, in view of its strategic importance to the country’s economy and the alleged shady deals at the corporation.

“With the change in baton at the corporation, the time is now to look into its books. The EFCC can no longer pretend not to know what is happening at the NNPC. The cover has been blown. It’s time for action!,” the party said.
But David-West says the probe and clearing of the Augean stable would be incomplete without immediate arrest of Obasanjo and the investigation of his handling of the oil industry while he held sway.

“Two (NNPC) GMDs under Obasanjo had been fired. First was Gaius Obaseki and now it’s Kupolokun. But I daresay there’s nothing these GMDs did that Obasanjo did not know about. He was the oil minister, so every policy, every contract and action must have had his approval.
“The GMDs were just the executors of these policies, and knowing Obasanjo, as overbearing as he is, he will easily shout them down. So, he cannot bring this irritating subterfuge and pretend as if he doesn’t know … including the half a billion naira spent on hotel bills by Obaseki. Obasanjo cannot approbate and reprobate, he cannot blow hot and cold. He must accept the liabilities, like he did all the assets.”

The ex-minister said if the NNPC boss had tried to mislead the former president such as awarding contract to a firm in which he had interest as alleged, Obasanjo could not plead ignorance as excuse because he had all the intelligence machinery in the country to check the move, adding: “During Gen Muhammadu Buhari’s regime, no oil contract was signed without our international agencies having investigated the firms. If he (Obasanjo) doesn’t know, then, he is incompetent, careless, inept, and irresponsible, because what we’re talking of here is 90 per cent of Nigeria’s economic fate! Nobody should shield him.

“But if EFCC is afraid to touch him, let him volunteer to surrender himself for probe. He did when the $2.8 billion so-called scandal broke out in NNPC. He was not mentioned, but he felt it a moral burden as the then Head of State. So, this is the same thing. He cannot play St. Peter here,” David-West fumed.

He added: “Selective justice is injustice. We cannot have one law for the big man and another one for small man. If Kupolokun will be arrested and probed, Obasanjo must then share in it.”

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