The House of Representatives Tuesday resolved that the former Board of the Petroleum Products Pricing Regulatory Authority (PPPRA) led by the former Chairman of the People’s Democratic Party (PDP), Ahmadu Ali, be prosecuted for its role in the monumental corruption that characterised the Petroleum Support Fund (PSF) management between 2009 and 2011.
At the opening of deliberation on the report of the Farouk Lawan-led Ad Hoc Committee on Fuel Subsidy Probe, members amended an earlier recommendation by the committee that Mr. Ali and other board members should be “reprimanded”, while “their decision, which opened the floodgate for the bazaar, be condemned in the
Prior to the unanimous resolution amending recommendation 16 of the report, the House noted that the wanton proliferation of real and pseudo companies that benefited from allocation of products for imports in the subsidy bazaar took a turn for the worse when the former PDP Chairman, who is also a one-time senator, was presiding over the Board of the regulatory agency as chairman.
The report had shown that at the onset of the PSF scheme in 2006, just six importers were involved in the importation of petroleum products, with the figure progressively increasing to 36 in 2007 and later 49 in 2009 prior to the appointment of Mr. Ali, who single-handedly raised the number to 140 between his assumption of office and 2011.
The report quoted Mr. Ali as admitting that the number of importers was deliberately raised by his board as a ploy to break the major marketers’ stranglehold on the petroleum product supply system to help flood the market with the products in times of scarcity, though observers say it was a way of giving job for the loyal boys by the ruling PDP.
Contacted by Premium Times Tuesday, Mr. Ali simply said, “No comment” and hung up the telephone.
The committee had criticised the decision as one implemented without a definite target volume, leading to supply glut, pointing out that this was PPPRA’s singular most devastating action.
The then Executive Secretary of the agency, Abiodun Ibikunle, who the lawmakers also said should be investigated and punished for official recklessness, had admitted that the Board followed no process in its operations, as the practice was “You walk in and indicate interest and you are considered,” for an import license.
The committees had reported the allocation and approvals to import products given to 35 companies before their formal registration with PPPRA, while several others were allowed to import products in a quarter and were paid subsidy without permit.
“This carte blanche for entrants was the singular most devastating decision of the agency,” the committee noted, adding: “The PSF guidelines on prequalification and monitoring completely broke down and the scheme became an avenue for all forms of patronage.”
Citing the example of two promoters (Eco-Regen Limited), who came to Nigerian from the USA with a proposal for a waste management contract with that NNPC, but ended up being awarded a plum contract to import 15,000 metric tons of products, from which they collected about N1.99billion as subsidy for products it did not supply.
Premium Times gathered that most of the beneficiaries of the proliferation policy were fronts of various chieftains of the PDP and top government officials, who neither registered as oil marketing/trading companies, nor met the conditions spelt out in the guidelines for prospective marketers of petroleum products in the country.
Some of the companies that got allocations of products to import without the necessary permits, it was gathered, belonged to top politicians who used proceeds from the resale of their allocation papers to sponsor their political programmes and activities.
“During the period (2009–October 2011), companies without facilities for storage or distribution sometimes got substantially more allocation than most major oil marketers and other independent marketers with impressive facilities,” the report said.
“The PSF scheme became a free for all as all manner of companies engaged in every conceivable business and not necessarily “oil marketing/trading company”, as required by the guidelines. Professionalism and competence was obviously not included in the criteria for qualification by the Board.
“Despite the noticeable non-viability of the policy of proliferation of oil marketers and the unbearable pressure of the ensuing corrupt practices on the economy, the PPPRA never deemed it fit to modify it or reconsider its decision for the betterment of the system.”