A Review of the Nigerian Energy Industry

Fuel subsidy mess: Activists demand more action from government

Oscarline Onwuemenyi

28 June 2012, Sweetcrude, Abuja – The Federal Government’s action last Tuesday to relieve the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Engr. Austen Oniwon, and three other top management executives of their positions may be the first knell in what would likely be a sweeping reform on the nation’s oil and gas industry, especially in the wake of reports by the House of Representative Ad hoc Committee on the Fuel Subsidy management which indicted several agencies and companies in maladministration of the fuel subsidy regime.

Government, it would also appear, has finally heeded the recommendation of the Committee and calls from several activists demanding that the NNPC be overhauled, if transparency and efficiency is to be achieved in the industry behemoth.

Asking the NNPC GMD and three of his executive officers including Mr. Michael Arokodare (outgoing Group Executive Director (Finance and Accounts), Mr. Philip Chukwu, (outgoing Group Executive Director Refineries & Petrochemicals), and Engr. Billy Agha, outgoing Group Executive Director (Engineering & Technology) to proceed on immediate retirement, some activists say, may be viewed as a good move but it does not solve the entire problem in the industry.

In the wake of the subsidy removal announcement on January 1, 2012, and the resultant protests that rocked the entire country, many stakeholders demanded that government agencies including the NNPC be probed for illegal dealings and other corrupt activities.

The leader of the Save Nigeria Group (SNG), Mr. Tunde Bakare, led the charge accusing the Corporation of “monumental corruption.” According to him, “The subsidy probe is a golden opportunity to clean the Augean stable, which the nation’s oil and gas industry has become. The monumental corruption in NNPC stinks to high heavens. As at today, nobody in Nigeria, with the exception of a few NNPC officials, knows how much we make from the oil sector.”

Also, in a recent interview with Vanguard in Abuja, the former Chairman of the National Working Group of the Nigerian Extractive Industries Transparency Initiative, NEITI, Prof. Asisi Asobie charged the Federal government not to ignore the report of the House Ad hoc committee on the fuel subsidy probe, warning that critical issues such as mismanagement of the subsidy process by officials of the NNPC.

Asobie noted that, “If you read the report you will find out that some of the things contained therein, especially the critical issue of people getting paid for not supplying petroleum products.

“Another critical issue raised by the report is that the Nigerian National Petroleum Corporation was paying subsidy to itself, which is very irresponsible and illegal. There is no law empowering the Corporation to do so; in fact, the constitution says the opposite. So, there are critical issues that were identified by the report that are still very relevant and nobody should rubbish the entire report merely because somebody has allegedly undermined his own integrity and disappointed Nigerians.”

According to Asobie, “Government owes it as a duty to Nigerians to ensure that the several critical points highlighted by the report are taken apart and implemented diligently. Issues to do with the fiscal regime, subsidy management where people were paid huge sums for products not delivered, and the NNPC issue, these should be addressed and redressed so that people who have been found culpable will be punished accordingly. That is the only way to inspire investor confidence in the sector,” he added.

Meanwhile, a coalition of non-governmental organizations under the name, End Impunity Now (EIN) Campaign, has petitioned the Economic and Financial Crimes Commission, EFCC, to prosecute the ousted Group Managing Director (GMD) of the Nigerian National Petroleum Corporation, NNPC, Engr. Austen Oniwon, and three members of his executive board.

The group which organized a protest rally in front of the NNPC headquarters in Abuja, noted that given the levels of corruption that have been exposed by the House of Representatives Ad hoc Committee report on the fuel subsidy management, it is simply not good enough to dismiss one or two persons and sweep the rest under the carpet.

In a statement from the coalition, signed by the Spokesman of the campaign, Mr. Jaye Gaskiya, and made available to our correspondent in Abuja, the group also demanded for the resignation of the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, and the Minister of Finance and Coordinating Minister for the Economy, Mrs. Ngozi Okonjo-Iweala, over their roles in the festering fuel subsidy management scandal.

The Campaign noted that while it welcomed the action by the President to sack the NNPC GMD and members of the NNPC Executive Board, it believes the step to be inadequate, insisting that more concrete steps need to be taken to demonstrate not only the commitment of the regime to fight corruption, but also the irreversibility of that commitment.

“Now is the time for the President to move forward with the people, to work together to end impunity. The issue of the rot in the petroleum sector in general, and the fraud and mind boggling corruption uncovered by the House of Representatives probe in general, goes beyond the NNPC, and includes all the other agencies and parastatals in the sector, including the Pipelines and Products Marketing Company (PPMC), the Petroleum Products Pricing and Regulatory Agency (PPPRA), the Department of Petroleum Regulation (DPR), among others.

“We are of the opinion that as each of these agencies has been implicated in the fraud and rot, the boards and managements of each of these agencies should also be sacked,” the statement noted.

The Campaign further urged for “total reform in the sector, the prosecution and punishment of indicted members of boards and managements.”

It added that, “We call on the EFCC to immediately launch prosecution of the GMD and other board members of the NNPC and the other agencies. The President should make available to the EFCC and the general public the reasoning behind the dismissal and the evidence that convinced the President to take this action.”

According to the spokesman of the End Impunity Now Campaign, this issue “further demonstrates the incompetence of the Petroleum Minister, under whose watch all sort of nefarious deeds are undertaken.

“How can the minister evade responsibility? The minister should do the honourable thing and resign, failing which the President needs to exercise his authority. We reaffirm our demand for sacking of the Petroleum Resources Minister forthwith and instruct the EFCC to undertake an immediate investigation into the activities of the office of the minister.”

It further noted that, “We are also of the opinion that the whole sequence of events and the revelations have shown that there is little or no coordination of the economy taking place. In this regard, the Minister of Finance, Mrs. Ngozi Okonjo-Iweala, also shares in the political responsibility for this monumental fraud and rot. We demand that she equally gracefully resign or be sacked by the President.”

The group stressed that the EFCC needs real political support from the President, adding that President Goodluck Jonathan should make a very clear public statement endorsing the leadership of the EFCC and re-enforcing the EFCC mandate to investigate and prosecute corruption wherever it is found.

“The President needs to allocate appropriate funding to build the capacity and resources of the EFCC to effectively execute its mandate,” the statement read.

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