30th April, 2015
Every Nigerian knows how impossible it would be for anyone to try to paint a positive picture of the country’s oil sector currently. This sector is supposed to be the country’s nest egg but proceeds from oil sales have often been diverted into private coffers through dubious accounting system operated by the Nigerian National Petroleum Corporation, NNPC, set up to regulate activities and stabilise the oil sector.
NNPC has become the conduit through which billions of dollars are siphoned. This is why it is described in some quarters as the shrine of corruption. We agree with the incoming President, General Muhammadu Buhari for saying he would focus his searchlight on the oil sector and the NNPC with a view to sanitising them. For once, that sector needs serious purging, a kind of surgery to make it transparent. Nigerians can no longer keep silent in the face of such magnitude of corruption allegations constantly levelled against NNPC and its officials. Top officials of the current administration further turned NNPC into what looks like cult organisation where a lot of secrets are kept from the public who are supposed to know how it runs its affairs because oil revenue is the collective patrimony of the Nigerian people.
For the first time in many years, President Goodluck Jonathan reluctantly agreed to a forensic auditing of the corporation by PriceWaterHouseCoopers, and what the auditing firm found, as seen from the report, shows that the allegation by former Governor of the Central Bank of Nigeria, CBN, and now Emir of Kano, Muhammad Sanusi II, that billions of dollars from sale of crude oil were unaccounted for may be correct after all. As expected, the auditing firm also expressed frustration that the CBN and some agencies refused to provide information the auditing firm needed to aid its job.
Major highlights of the report shows that $980 million was over charged as subsidies on petrol and kerosene between January 2012 and July 2013, $3.38b was spent on kerosene subsidy for the period under review even though the product still sold at cut-throat price and remained unaffordable; while a total sum of $13, 637, 077, 362 from sale of domestic crude was not remitted.
PriceWaterHouseCoopers also said it could not find supporting documents to substantiate the $0.25 billion claimed as Nigerian Ports Authority charges; $59,324,737.01 spent on charter/hire services; $6,658,588.74 of the $17, 767,683.54 claimed as management fee of MT Tuma and MT Oloibiri; $5,457,006.98 of the $46, 265,215.13 claimed as crude transport payment; $6,707, 826.05 on marine through put; $11,896, 654.71 claimed as repair cost on pipeline vandalism; management charge out rate claim of $59,712,530.83; $10, 257, 161.07 claimed as enviromental remediation as well as a capital expenditure of $27,179. 005.48. It also said a total sum of $305,885,083.77 could not be verified due to exceptions.
In some cases, it was discovered that subsidy claims were paid more than once to oil firms. Yet, while many analysts cried out about the possible consequence of such unrestricted squandering and abuse of the sector that provides the major chunk of the country’s revenue, government officials behaved as if all was well. The consequence of the massive corruption in the oil sector is that the Nigerian government is broke. This could be seen from many states’ inability to pay salaries and carry out governance as expected. We believe that for the government of Buhari to have enough financial resources to govern effectively after being inaugurated on 29 May, every stolen money from the oil sector must be traced and returned to the government.