House subsidy panel wants NNPC, PPPRA managements, boards prosecuted, seek refund of missing N1 trillion

The long-awaited report of the House of Representatives fuel subsidy inquiry has called for a “complete overhaul” of the Nigerian National Petroleum Corporation (NNPC) leadership and the refund of more than N1 trillion of fuel subsidies among far-reaching recommendations released today.


The report indicts the corporation’s management and board, as well as those of the Petroleum Product Pricing and Regulatory Agency (PPPRA), and recommends the prosecution of those found wanting for violations that cost the nation trillions of naira.

The NNPC must be made to refund to the federal purse N705 billion; PPPRA N312 billion; fraudulent marketers who drew funding without importation, N8.7 billion; while companies that refused to appear during the investigations are to repay N41.9 billion.

“The committee believes that if the Petroleum Subsidy Fund was properly managed, the sum of N1.07 trillion would have been available to the three tiers of government,” the report said.

The abuses that led to the loss of that amount were laid at the doorsteps of the NNPC and the PPPRA, the two outlawed government institutions that have been repeatedly accused and indicted for corruption activities.

The indictments covers past and serving management of the NNPC and the PPPRA, and in the case of NNPC, the current board and management, led by Austin Oniwon, is recommended for sack.

After its presentations was repeatedly rescheduled, the more than 200-page document was finally laid before the House on Wednesday amid concerns the Farouk Lawan-led committee, which carried out the investigations, had come under severe pressure to soften its position.

Deliberations on the 61 recommendations made by the committee, are expected on Tuesday next week, the House said.

Many lawmakers were said to have been concerned that parts of the findings had been leaked to the media. Minutes after being laid, the House held a closed-door session for nearly one hour before emerging to adjourn its proceedings.

Mr. Farouk said the committee carried out extensive work and consultations and investigations to arrive at the recommendations.

Based on the findings, the committee recommends a petrol subsidy of N557 for 2012 as well as kerosene subsidy of N249 billion. It adds that the true consumption level of petrol in 2011 was 31.5 million litres per day, recommending 33 million litres per day for 2012. 

The document lists 15 companies that obtained foreign exchange but failed to import petroleum products, and list another 18, including Mobil Oil, Ibafon Oil and Rocky Energy as those that refused to be investigated.

More than any other establishments, the hammer fell more on the NNPC and PPPRA, blamed for series of abuses including over-deductions, unilateral discount of prices, failure to remit tax, accreditation of unqualified marketers and falsification of figures.

Most of the charges had been identified in the KPMG report, which was commissioned by the ministry of finance but was ignored by the administration. However, in shady circumstances, respected audit firms, Delloite and Olusola Adekanola, and Akintola Williams approved many of the NNPC’s and PPPRA’s actions.

The committee recommends both firms be blacklisted for three years.

The reports says NNPC should refund N310 billion being subsidy on kerosene it overpaid itself against a presidential directive in 2009.

The corporation is also to refund another N285 bilion as over-deductions on subsidy as against approvals from the PPPRA, while a further refund of N104.6 billions to account for the illegal granting of discounts on crude oil price in 2009.

The PPPRA is to refund N312 billion being illegal self-payment it made in 2009 and 2010 as administrative charges.

The report recommends that the Economic and Financial Crimes Commission (EFCC) should prosecute those involved in all the abuses.

Executive secretaries of the PPRA between 2009 and 2010 should be prosecuted for supervising the fraud, the report adds while the ministry of petroleum should be restructured.



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