01 June 2012, Sweetcrude, ABUJA — MORE revelations emerged, Thursday, at the Senate resumed hearing in the ongoing investigation into the mismanagement of fuel subsidy in the country, as the international auditing firm, KPMG, said inefficiency in the Nigerian National Petroleum Corporation, NNPC, costs the country $65 million from 2007 till December 2010.
KPMG also told the Senator Magnus Abe-led Joint Senate Committee on Petroleum Resources, Downstream, Appropriations and Finance, that the Governing Council of Petroleum Products Pricing Regulatory Agency, PPPRA, was very weak, as most vital decisions of the organisation were taken by the Executive Secretary, Reginald Stanley.
While answering questions from the Committee, a partner of KPMG, Dimeji Salaudeen, who denied receiving any letter from the Senate Committee, inviting the company, said: “We only received e-mail last night and also heard it on network news. What we did was to put aside every other business.
“We had today (Thursday) to ensure that we are here this morning (Thursday) because of our respect for the Committee and the Senate.”
On the work the company did during the subsidy regime, Salaudeen, said: “The work on the subsidy regime was commissioned in 2010 and what we were required to do was to review the subsidy regime and make recommendations to the Federal Government and the scope of our review was to cover the period from January 2007 to June 2010.”
The Committee had summoned the Minister of Finance, Dr. Ngozi Okonjo-Iweala, and former Executive Secretaries of the PPPRA to appear before it on Tuesday next week. It also subpoenaed the Chief Executive Officers of Folawiyo and Oando Plc to appear next week or risk the full wrath of the law if they fail to appear.
Speaking further, the auditing firm alleged that PPPRA fraudulently paid about N25 billion to oil markers, adding that some unregistered companies were also mandated to import fuel into the country.
Salaudeen said: “We were required to review the subsidy regime. In the course of our work, we had interactions with NNPC, PPPRA and with a few marketers. In the course of the work, we actually had major challenges.
“The bulk of the challenges had to do with getting information on a timely basis from a number of the participants. In some cases, we got complete information and made specific recommendations to the government.
“We found that N1.6 trillion was paid out as subsidy between 2007 and 2010, N460 billion per annum. We also observed that there was a lot of concentration in terms of particular people receiving the bulk of the sum. We found that 10 out of the marketers got over 80 percent of the total sum of allocations.
“If you consider the fact that as at the time we did our work, there were close to 70 marketers and that when the scheme started in 2007, they were only 14 marketers, the gate opened and certain participants, without ability to operate properly, were allowed in.
“We took the record, which was presented by PPPRA and did a straight review of the figure.”