Monday, April 21, 2014

Petroleum marketers fleece Nigerians N22bn monthly as fuel scarcity persists

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In most states across the nation, fuel sells at an average of N120.

Petroleum marketers in Nigeria are making excess profits off petroleum products, swindling the government of billions in subsidy refunds and fleecing citizens with high petrol prices.

A survey carried out by PREMIUM TIMES early November reveals that the N97.00 per litre controlled price of petrol is sold only in Abuja city (though not readily available), the central streets of Lagos, and in filling stations owned by government’s Nigerian National Petroleum Corporation.

In other states, consumers buy petrol at prices ranging from N110.00 to N170.00 per litre. In Kogi for instance, fuel sells at N110 while in Taraba state, the pump price of fuel is N170.

Following a massive civil unrest in January, with thousands protesting the total withdrawal of subsidy on petroleum products by President Goodluck Jonathan, the government accepted to partially reinstate subsidy.

The government subsidizes petrol by N44.00, forcing down its price from the proposed N141.00 to N97.00. But while the government has continued to pay the subsidy fee to genuine importers, according to the Finance Minister, Ngozi Okonjo-Iweala, the marketers fleece Nigerians with a countrywide pump price of N120.00 average, N23.00 higher than the approved price.

The PREMIUM TIMES survey shows that the fuel scarcity which began in Abuja last August before spreading to other states persists in 18 states. The scarcity has also triggered a nationwide disregard for the government controlled price while government officials watch without taking actions.

The survey shows that in states where the products are available at a drive -in-and-buy quantity, the pump price is higher than the approved amount.

Huge perfidy

Nigeria’s daily domestic consumption of petrol is estimated at 32 million litres.

At that rate, marketers, including the NNPC, make N1.4 billion daily from subsidy payments and at least, N736 million extra from consumers, daily.

In a 30-day month, petroleum marketers rob Nigerian consumers of about N22 billion; which is different from the expected monthly subsidy payment of about N42.24 billion.

DPR unable to regulate

The Department of Petroleum Resources, DPR, a major regulator in the oil industry, which is supposed to ensure that marketers sell petrol at approved amount is comatose.

The possible reason for the incompetence of the agency, one of several under controversial oil minister, Diezani Alison-Madueke, was stated on Tuesday by a senior official of the agency.

The Operation Controller of the Department in charge of Nassarawa and Benue, Manasseh Akpah, said the department lacked funds and human resources to enforce the subsidized price in fuel stations.

“We cannot embark on exercise that will have mitigated the activities of illegal marketers due to paucity of funds,’’ he said.

Mr. Akpah said the understaffed department needs funds to employ additional staff, to procure more operation materials and to make sure that petroleum products are sold at the approved prices.  

Cat and mouse game

Back in august, when the fuel scarcity first began, the Federal Government blamed it on 21 petrol marketers indicted for corruption in the 2011 fuel subsidy scam.

These companies were earlier indicted of large scale fraud by Access bank’s Aigboje Aig-Imoukhuede-led presidential committee which investigated the 2011 fuel subsidy payments.

According to the Finance Minister, companies owned by wealthy Nigerians such Conoil Plc business mogul, Mike Adenuga (who was later honoured with the second highest official award in Nigeria, the GCON); and Eterna Oil, whose directors are Mahmud Tukur, son of Peoples Democratic Party National Chairman, Bamanga Tukur, and Fola Adeola, the Vice Presidential candidate of the Action Congress of Nigeria in the last presidential elections – were behind the fuel crisis.

The oil marketers fired back immediately, denying the claims. Despite the claims and counter claims, fuel scarcity, unavailability and inflated prices still persist across the country even as black market operators have taken over in some states including Abuja.

The subsidy payment scam broke late 2011, following a motion to investigate the sector by a Senator from Kwara State, Bukola Saraki. Since then, the government and oil marketers have been playing the Cat and Mouse game.

Mr. Saraki’s motion was followed by an inconclusive senate probe. The House of Representatives also launched a probe after the January protest.

The findings of the House panel had groundbreaking revelations of massive fraud in the subsidy sector. The report was quickly drowned by allegations that a businessman, Femi Otedola, whose company was to be indicted by the report bribed the panel’s chairman, Farouk Lawan, with $600 thousand, part which Mr.  Lawan allegedly stuffed in his cap on one transaction.

The corruption allegation has been blamed for government’s non implementation of the House of Reps report. The Economic and Financial Crimes Commission has however begun the prosecution of some of the marketers believed to have fleeced the nation of subsidy funds.

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