Okonjo Iweala: Oil Theft’ll Affect FG’s Revenue

15 May 2012

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Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala

•Wades into SEC crisis

From Ndubuisi Francis in Abuja

Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has expressed concern over the spate of oil theft in the country, saying it would impact negatively on the nation’s revenue profile.

The minister, who spoke with THISDAY in Abuja, said a recent media report that vessels loaded with about 1.2 million barrels of oil were seized from illegal bunkerers was a disturbing signal, and must be tackled headlong.

According to the minister, the Nigerian National Petroleum Corporation (NNPC) had reported that 17 per cent of theft was recorded, noting that the percentage represents about a  fifth of the nation’s revenue target.

“Bunkering is an activity we just have to stop. This is one thing we just have to stop. The NNPC reported that 17 per cent of oil production was lost in April, and this is about one fifth of the revenue,” the minister lamented.

Also, the  Director General, Budget Office of the Federation (BOF), Dr. Bright Okogu, said the increasing spate of illegal bunkering activities was capable of affecting government’s revenue projection,  depending on the magnitude of the theft.

In a telephone chat with THISDAY, Okogu said relevant  facts  such as the quantum of oil lost to bunkering and the oil fields from where the thefts were carried out, were some of the factors that should be established in arriving at the level of  revenue  loss of the government which would be affected or not depending on the magnitude.

The BOF DG also stated that the issue of whether bunkering affects Joint Venture partners was a relevant factor, adding that the fact that such activities were happening at all was bad a news.

The 2012 budget is based on certain key projections, including an oil production of 2.48 million barrels per day, up from 2.3 million in 2011 as well as a revenue projection of N9.406 trillion. Of this, total available revenue for the Federal Government is N3.644 trillion.
Meanwhile, as a way of cleaning up the fuel subsidy management process, the Ministry of Finance has evolved new measures to streamline subsidy claims and payments as part of efforts to remove the pitfalls that are inherent in the extant structure.

According to Okonjo-Iweala, the Technical Committee on Payment of Subsidies which is a separate think tank, is meant to ensure fool-proof management of fuel subsidy claims and payments system.

The minister said so far, N451 billion had been paid this year as a  backlog of subsidy claims for 2011 to oil marketers, adding that the committee will also verify all the claims.
“This is in addition to about N1 trillion already paid to oil marketers as at December last year as subsidy claims.”

“It is still ongoing and we're trying to see if this is the end. But so far, this is what has been paid. But these arrears are now going to be verified by this committee to make sure the payments are valid. You know, the payment system involves issuing notes to marketers when they send in claims," she said.

The ministry has also waded into the problem in the capital market and the crisis of confidence among members of the Board of the Securities and Exchange Commission (SEC).

According to the minister, a sub-board committee is already in place to look into the board crisis, adding that she had been meeting with the Chairman of the SEC Board, Senator Udo Udoma on how best to resolve the crisis.
The minister, whose ministry oversees SEC, said she was passionate about resolving the problems.

Tags: News, Nigeria, Featured, Okonjo Iweala, Oil Theft, FG’s Revenue

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