The Group Managing director of the NNPC, Austine Oniwon, told the senate committee investigating the management of Nigeria’s fuel subsidy that he was ignorant of the whereabouts of 65,000 barrels out of the 445,000 barrels of crude allocated to the corporation daily.
Mr. Oniwon explained that the NNPC entered into a swap deal – crude for refined PMS – with three refineries 210,000 barrels per day while 170,000 is refined by local refineries daily.
Duke Oil, a subsidiary of NNPC gets a swap deal worth 90,000 barrels per day, while Transfigura UK and SIR, an Ivorian refinery with a refining capacity of 80,000 bpd, gets 60,000 barrels per day each.
Mr. Oniwon could not however account for the utilization of the balance of 65,000 barrels per day – crude oil worth USD6.5 million (N1.033 billion) daily and USD195 million (N31.005 billion) monthly.
When probed by the lawmakers, the GMD who admitted that NNPC had gained up to N2.157 trillion from the subsidy scheme since 2006 also failed to give an account of the volume and value of PMS it receives in return for its various swap deals.
“Definitely, it (volume of PMS received in exchange for a barrel of crude) is available but I don’t have the figures to give you,” Mr. Oniwon told the lawmakers.
The GMD could not also give the name of an oil company he had earlier, the previous week, claimed was indicted for declaring products it did not import.
The senate investigative public hearing on the management of Nigeria’s fuel subsidy started three weeks ago and is becoming increasingly frustrated by the secrecy that characterises the operations of the NNPC and the management of Nigeria’s oil sector.
The probed was started after Bukola Saraki (PDP Kwara State) moved a motion challenging the astronomical expenditure on the scheme this year. Records show that N256 billion was budgeted for the subsidy scheme for 2011, but the reality is that N1.46 trillion has been spent on the scheme this year.
While defending the expenditure in an earlier hearing, the Petroleum minister, Diezani Alison-Madueke blamed the excessive rise in subsidy expenditure to the rise in international crude price, increase in Nigeria’s vehicular usage and increase in forex.
The finance minister, Ngozi Okonjo-Iweala, argued differently. She said the rise was astronomical because only a “notional figure” was put in the budget.
The junior finance minster, Yerima Lawn Ngama, yet argued differently. He said the high cost of 2011 subsidy was because the 2011 subsidy budget was predicated on an initial plan – that was not strategically expedient – remove subsidy in March, a month before the recent presidential elections in the country.
The hearing has also revealed entrenched fraud in the petroleum industry and a group of businesses the government has always called “The Cabal” and blamed for the failure of the scheme.
The senate panel, however, appears not satisfied with the information gotten so far, after three public hearing and is set to take a fourth before its final report is ready.