NOTHING better illustrates the rot in the nations oil sector than the shocking revelations from a recent Senate probe into the management of the oil subsidy over the years. The Senate Joint Committee investigating the management of the scheme disclosed that it had uncovered a payment of N192.5billion on excess petroleum products importation. Hence, it ordered the Minister of Finance, Ngozi Okonjo-Iweala, to forward to the committee details of fuel imports audit certificate in the last 11 months. The issue has been a subject of investigation by both committees of the House and Senate since the Federal Governments announcement of a plan to remove the subsidy and thus increase pump prices of fuel. Also shocking was the revelation that the Nigerian National Petroleum Corporation imported a staggering 17 billion litres of petrol between January and September, which was above the expected 14.5 billion, based on official minimum daily consumption figure of 40 million litres. Already, there are disturbing reports that a significant portion of fuel imported into the country ends up in neighbouring nations. The panel argued that an excess of 2.5 billion litres increased the subsidy bill chargeable to revenues accruable to the Federal Government, thus faulting the deduction by the NNPC in excess of what was provided for in the Act. While the total amount provided in the 2011 budget for subsidy payments is N245 billion, Okonjo-Iweala disclosed that the subsidy bill had gone up to N1.54 trillion as at October. The disclosure has vindicated various reports that depict the nations oil industry as corruption-ridden.There are also glaring discrepancies in the various official figures. While the Petroleum Products Pricing and Regulatory Agency put the amount of subsidy shared between January and August this year at N1.34 trillion, the Senate committee disclosed that N1.42 trillion was distributed during the period, with the figure paid on subsidy from 2006 to date put at N3.65 trillion. Though the Senate has vowed to probe the disbursements to sanitise the system and expose those involved in the subsidy scam, there are already suspicions that the exercise may be another smokescreen that will soon fizzle out. Yet, amid unanswered questions over the manner the scheme has been handled, the government has vowed to go ahead with its planned subsidy removal and, consequently, foist another increase in fuel prices on Nigerians. Though it is using the subsidy burden and the rot in its application to strengthen its campaign, notwithstanding its likely negative consequences on Nigerians, the already impoverished Nigerians are not prepared for harder times. While the labour unions continue to oppose the move, President Goodluck Jonathan and his aides are saying the government will go ahead. He had said in October that the phasing out of the subsidy beginning from 2012 fiscal year "... will free up about N1.4 trillion in savings, part of which can be deployed in providing safety nets for poor segments of the society to ameliorate the effects of the subsidy removal." Jonathan said the move was meant to "stimulate the economy" and ensure "job creation." Similarly, the Finance Minister who also heads Jonathans economic management team, had argued that between 2006 and 2011, the nation spent N3,65.17 trillion to subsidise petroleum products prices, saying "subsidy in 2011 alone so far is over N1.3 trillion, which is higher than our capital budget." She said since the subsidy did not get to the poor, "it is clearly unsustainable." These are, however, claims that will remain unconvincing until the government is seen to be truly committed to national self-sufficiency in local refining.As revelations from the legislative chamber have shown, the government and NNPC have over-pampered the oil import cartel. This has resulted in a scam made possible by the connivance of government agencies. Some of the beneficiaries of the subsidy are perceived government cronies. It was revealed that over 100 companies, including construction firms, participated in the sharing of N1.42 trillion between January and August 2011. The beneficiaries include; Oando Nigeria Plc., N228.50 billion; MRS, N224.81 billion; Enak Oil and Gas, N19.68 billion; Bovas & Co. Nigeria Limited, N5.68 billion; Obat, N85 billion and AP, N104.5 billion. Corruption, perpetrated by a powerful cartel, has been identified as the undoing of the nations oil industry. Graft is perpetrated through the importation of refined oil and exportation of crude. Others areas of leakages are in the award of licences and contracts, bottlenecks, inefficiencies and illegal bunkering. The Federal Government has no justification to cite the fraud in the administration of subsidy to impose additional hardship on Nigerians. The oil cabal has obviously worked against a successful local refining. The Governor of the Central Bank of Nigeria, Mallam Lamido Sanusi, once disclosed that the government in 11 months sold a whopping $8 billion to oil marketers for the importation of petroleum products in 2011. Regrettably, the Jonathan administration has done nothing on the graft cartel to earn the peoples trust and confidence.The government should work towards stopping the nations dependence on imports. It should immediately provide the necessary environment for the take-off of private refineries. Ultimately, local refining will go a long way in protecting Nigerians from the perpetual subsidy rip-off. The National Assembly must be sincere and undaunted in the ongoing investigation to expose those that have abused the scheme. Jonathans government should avoid courting social unrest that may result from another rise in energy prices.
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