Senate Exposes Fuel Subsidy Beneficiary Companies

[emezico]

The Senate Joint  Committee investigating the management of fuel subsidy, on Friday, during public hearing, revealed that more than 100 companies, including construction companies participated in the sharing of N1.426 trillion between January and August 2011.

This contradicted the figure  of the Petroleum Product Pricing Regulatory Agency (PPPRA) which put it at N1.348 trillion.

The figure, however, paid for  subsidy between 2006 to date, was put at N3.655 trillion which the  committee  was uncomfortable with  because of the astronomical  jump  in 2011.

The committee  was surprised that some beneficiaries were even construction companies that had nothing to do with oil.

According to the committee, the oil companies that benefited from the sharing of  the subsidy include : Oando Nigerian Plc., N228.506 billion; MRS, N224.818 billion; Enak Oil & Gas, N19.684 billion, Bovas & Co. Nig. Ltd, N5.685 billion; Obat; N85 billion and AP,  N104.5billion.

Others, according to the  Chairman of the Committee, Senator Magnus Abbe, were  Folawiyo Oil, N113.3billion;  IPMAN Investment Limited, N10.9billion; ACON,  N24.1billion;  Atio Oil, N64.4billion;  AMP, N11.4billion; Honeywell, N12.2billion;  Emac Oil, N19.2billion; D.Jones Oil, N14.8billion;  Capital Oil, N22.4billion and AZ Oil, N18.613billion.

The list also comprises Eternal Oil, N5.57 billion; Dozil Oil, N3.375 billion; Fort Oil, N8.582 billion while some construction companies were also on the list.

The PPRA, however, disowned the alleged N450 billion kerosene subsidies owed the Nigerian National Petroleum Corporation (NNPC) by the Federal Government, saying the claims were not recorded in their books.

The Executive Secretary of PPPRA, Reginald Elijah, told the committee that between 2006 and September 2011, a whopping N3.655 trillion was expended on fuel subsidies.

The figure did not tally with the figures of N1.426 trillion submitted by NNPC as subsidies on the products as at August 2011, but argued that the actual and correct figure was N1.348 trillion.

The panel  consequently  discovered that a good number of the marketers did not meet the criteria,  but benefitted  from the subsidies and were in the habit of making false claims.

Senator Abe informed that one of the criteria is that  a beneficiary must  own tank farms (petrol deports) of not less than 5,000 metric tonnes and should be registered with the Corporate Affairs Commission (CAC) as an oil company.

He  was surprised that  only 11 marketers owned storage facilities, while the rest were "throughput" (sharing depots with filling stations) and some were registered construction companies.

However, NNPC Group Managing Director,  Austin Oniwon,  told the committee that  a locally refined barrel of petrol cost $5 with a subsidy of N11.85 per barrel, with the independent marketers were being subsidized with N77 per litre of N138.71, amounting to N12,243 per barrel.

The committee ordered  Oniwon to produce the total amount expended on the Turn Around Maintenance (TAM) of all the three refineries from 1999 to date; total dividends accruing to NNPC from the Joint Venture Companies (JVC); names of accused marketers; investigations conducted, results and subsequent punishments to defaulters  before it adjourned to December 12,  2011.

Tribune