Fuel Subsidy Removal: The "Fraud" Committed By "Companies" Who Enriched Themselves With Fuel Subsidy

Before the eventual removal of the fuel subsidy by the Nigerian government, citizens of Africa's most populous nation had envisaged that the government would make the move. When the National Assembly deliberated on the fuel subsidy issue and it was opposed by some members of the legislature, those privileged to know the internal workings of the Goodluck Jonathan administration pointed it out that the President would carry on with the move regardless of the opinion of the National Assembly.

The first indication that the subsidy hitherto enjoyed on petroleum was gone came when the President presented the 2012 Budget Proposal to the legislative arm of government and no amount was allocated as fuel subsidy in the whole document.

For instance, while the Petroleum Products Pricing Agency (PPRA) put the amount spent as fuel subsidy between January and August 2011 at N 1.348 trillion, a figure that contradicted that was arrived at in the course of the Senate's public hearing on the issue. It was also claimed by the Federal Government that as at the end of the first quarter of 2011, the amount spent on fuel subsidy stood at N 74.9 billion. The Nigerian National Petroleum Corporation (NNPC) submitted N 1.426 trillion as the amount spent on subsidy from January to August.

Incidentally, the PPRA had earlier made it known that it spent N 621 billion on fuel subsidy in 2010.  It was also found out that the amount being accounted as being expended on fuel subsidy was shared by companies including construction firms and other companies that have nothing to do with fuel importation.

Those who benefitted from the fuel subsidy largesse included
Folawiyo Oil, N113.3billion,

Oando Nigeria Plc., N228.506 billion

IPMAN Investment Limited, N10.9billion,

MRS, N224.818 billion,

ACON, N24.1billion,

Atio Oil, N64.4billion;

AMP, N11.4billion,

Enak Oil & Gas, N19.684 billion,

Bovas & Co. Nig. Ltd, N5.685 billion;

Obat; N85 billion

and AP, N104.5billion.

Other companies on the beneficiaries' list include

Honeywell, N12.2billion,

Emac Oil, N19.2billion;

D.Jones Oil, N14.8billion;

Capital Oil, N22.4billion,

AZ Oil, N18.613billion,

Eternal Oil, N5.57 billion;

Dozil Oil, N3.375 billion;

Fort Oil, N8.582 billion.

It was found out that not only did most of the companies fail to meet the basic criteria which include that beneficiaries should own tank farms (petrol depots) with capacity of not less than 5,000 metric tonnes and also register with the Corporate Affairs Commission as oil companies; they were also found to have formed a habit of making false claims. Only eleven of the marketers actually own tank farms, the others share depots with filling stations, yet they claim subsidy from the government.

Till date, no one knows what becomes of the petroleum products refined in Nigeria. A substantial part of the kerosene sold in Nigeria is refined at home but that has not in any way made the product cheaper. Kerosene is released at N 49.10 per litre yet the teeming Nigerians who use it as cooking fuel do not get it to buy for less than N 95 per litre. Street Journal's investigation revealed that with the connivance of some unscrupulous marketers and NNPC officials, majority of the kerosene that should get to the markets end up being sold to airline operators.

CULLED FROM STREET JOURNAL