No cause for celebration


MINISTER of Petroleum Resources, Mrs Diezani Alison-Madueke, must certainly have been on top of the world when she announced with glee that the Federal Government had last year saved N850 billion in the downstream sector of the petroleum industry. 

According to her, the savings included N467.20 billion obtained from the N32 per litre mark-up in petroleum pump price of January 2012 and the N142.30 billion savings from the N20 million litres per day reduction in national consumption of Premium Motor Spirit (PMS).

While claiming that the government had been able to maintain stability of products supply as well as putting in place stringent regulatory measures to make it difficult for dubious marketers to short-change the system, the minister said “The Federal Government has done extremely well in halting fuel subsidy scams in the country, and as such, our efforts at transparency and accountability are beginning to yield positive results”.

Without prejudice to the various positive reforms, which the minister reported as being undertaken in the petroleum sector, we believe that her self-congratulatory elation on the reported savings of N850 billion in the downstream oil sector is misplaced and even self-indicting. For, this only confirms that the data on which the Federal Government predicated its decision to remove the purported fuel subsidy, thereby increasing the pump price of petrol by 100 per cent to N142 per litre were thoroughly faulty and unreliable. Yet, Nigerians were told that if the fictive subsidy was not removed, the economy would collapse!

The implication of the minister’s disclosure is that if Nigerians had not vehemently protested the insensitive fuel price hike, the fraudulent oil marketers profiting from a phantom oil subsidy would have continued to smile to the banks at the expense of millions of deprived Nigerians. It is clearly not enough for Mrs Alison-Madueke to congratulate herself and the Federal Government for purportedly taking steps to strengthen regulations and curb the antics of dubious oil marketers short–changing the system. The point is that the fuel subsidy scam occurred under the minister’s watch and somebody must be held responsible for what may be negligence, sheer incompetence or even collusion.

Impressive as they may be, the various on-going reforms itemised by the minister cannot achieve the desired objectives if the issue of massive corruption in the petroleum industry, particularly the Nigerian National Petroleum Corporation (NNPC), is not decisively tackled. Unfortunately, the Federal Government has shown little inclination in this direction. For instance, the House of Representatives ad-hoc Committee on the Management of the Fuel Subsidy Scheme found that about $6 billion was defrauded from the fuel subsidy fund in the last two years. According to its report, a total of 15 fuel importers collected more than $300 million in two years, without importing any oil.

It is unfortunate that while some oil importers allegedly involved in this monumental swindle have been charged to court by the Economic and Financial Crimes Commission (EFCC), the prosecution has been perfunctory and anything but diligent. Indeed, some of the indicted oil importers have reportedly been listed as suppliers for the third quarter of the year.

In the same vein, nothing has been done about the damning revelations in the Nuhu Ribadu-led Petroleum Revenue Special Task Force report, which, among others, found that oil funds that should accrue to the federation are treated by the NNPC as a reserve of funds that could be used for illicit purposes without accountability.

Again, the KPMG audit report detailing massive fraud in the NNPC has been ignored by government. Can any meaningful reforms towards greater transparency and accountability in the oil sector be achieved under Mrs Alison-Madueke’s watch? We doubt it.
Above all, we do not have any evidence in the economy of any such savings. Yet, it is too significant to be lost in the system.



The Nation editorial
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