Subsidy: House Wants Ahmadu Ali Prosecuted

25 Apr 2012

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Senator Ahmadu Ali

By  Onwuka Nzeshi  and Ejiofor Alike 

Former chairman of the Peoples Democratic Party (PDP), Senator Ahmadu Ali, should face prosecution over his tenure as chairman of the board of Petroleum Products Pricing Regulatory Agency (PPPRA), the House of Representatives has recommended.

Adopting the report of the Ad Hoc Committee on Monitoring of the Subsidy Regime Tuesday, the lower chamber accepted a recommendation that Ali, who was board chairman from 2009 to 2011, and the entire members of the board during the period be prosecuted for their decisions which allegedly opened the floodgate for the abuse of the system.

Other recommendations adopted by the House include: “That the management and board of the NNPC should be completely overhauled and all those involved in infractions be further investigated and prosecuted by the relevant anti-corruption agencies.

"That all the payments which the PPPRA made to itself from the Petroleum Support Fund accounts in excess of the approved administrative charges which is due to it under the template should be recovered and paid back into the fund. The officials involved in this infraction should be further investigated/ prosecuted by the relevant anti-corruption agencies.

"That the Executive Secretaries of the PPPRA who were the accounting officers and under whose watch these abuses were perpetrated should be held liable.

"That the Executive Secretaries of the PPPRA between 2009-2011 should be investigated and prosecuted for the official recklessness exhibited in the implementation of the board decision to reverse the qualification for participation in the scheme."

The House was however divided on the issue of resolving the violations in the oil sector using the Petroleum Industry Bill (PIB).

Some members were opposed to the recommendation that the executive should send the PIB to the National Assembly.

They argued that there was already a PIB drafted by the House which should be passed expeditiously but this also generated uproar from those not comfortable with the idea of a PIB.

Speaker of the House, Hon. Aminu Tambuwal, had at the opening of the session, commended his colleagues for their "commitment and patriotism" during the fuel subsidy crisis in January and urged them to consider the report of the ad hoc committee on the monitoring of fuel subsidy regime with diligence.

But the House bowed to external pressures in its consideration of the fuel subsidy probe report as the lawmakers suspended the sanctions earlier recommended for some 17 oil marketing firms indicted by the report.

Instead, the House gave the marketers two weeks to submit themselves to the Ad Hoc Committee on Monitoring of the Subsidy Regime in order for them to receive fair hearing.

The lawmakers also cleared Zenon Petroleum & Gas Limited as well as Synopsis Enterprises Limited of complicity among companies that obtained foreign exchange but did not import petroleum products.

The ad hoc committee explained that the latest information available to it indicated that these two firms should not have been grouped alongside the others because they were not beneficiaries of the Petroleum Support Fund.

Among the marketers that got reprieve were Mobil Oil Nigeria, Techno Oil Ltd, AX Energy Limited, Nepal Oil and Gas Service, Oilbath Nigeria, Somerset Energy Services, Stonebridge Oil and Crust Energy Limited.

Others included Mut-Has Petroleum, CAH Resources Association, Fresh Synergy Limited, Ibafon Oil, Lottoj Oil and Gas, Oakfield Synergy Network Limited, Petro Trade Energy Limited, Prudent Energy & Services and Rocky Energy Limited.

The report had asked these marketers to refund a total of N41.936 billion because they allegedly refused to appear before the committee and never submitted the required documents during the investigation.

But the group of 17 marketers have been at daggers drawn with the House since the report was released last week and had threatened to institute a N100 billion legal action to challenge the report.

They had in several paid advertorials alleged that they were not invited by the House Ad Hoc Committee on Monitoring Subsidy Regime and argued that it was unfair for the committee to have recommended sanctions against them after they were excluded from the process.

On the first day of consideration of the subsidy report, the House adopted a total of 35 of the 62 recommendations contained in the report.

The Green Chamber was filled to capacity and the atmosphere charged as lawmakers endorsed the principal recommendations asking the Nigerian National Petroleum Corporation (NNPC), the PPPRA and some oil marketers to refund about N1.070 trillion within three months for alleged violations of the subsidy scheme.

They also adopted the recommendation directing the Auditor General of the Federation (AGF) to set the process in motion for the auditing of the accounts of the NNPC to determine its solvency.

According to the report, an audit of the NNPC had become imperative given the plethora of claims of indebtedness and demands to pay its creditors which if not well handled could affect not only the supply and distribution of petroleum products but the entire economy.

Meanwhile, PPPRA has described as untrue an allegation that it paid itself N312 billion purportedly contained in the committee’s report on subsidy regime.

In a detailed official statement released yesterday, the agency also debunked claims that N999 million was paid to unknown entities, saying that the money was paid to 15 known marketers.

The agency stated that the N312 billion in question covered subsidy and other payments, including foreign exchange differential and interest on late payment of subsidy, approved by government based on the report of the auditor appointed by the Federal Ministry of Finance.

PPPRA also explained that the N312 billion was paid legally through the e-payment system, adding that it was not administrative charge as alleged.

It acknowledged that it usually advised the Central Bank of Nigeria (CBN) to debit the Petroleum Support Fund (PSF) account while crediting the marketers, in line with government’s policy of e-payment, stressing that the records of this payment still reside with the agency and CBN and were available for scrutiny.

The PPPRA also reiterated that the allegations of fraudulent duplication of payments to unknown beneficiaries could not be substantiated as the N999 million was paid to 15 known marketers.

It listed the 15 beneficiaries to include MRS Oil and Gas Ltd, Oando Plc, AP Plc, Brittania-U Nig. Ltd., and AITEO Energy Resources Ltd.

Others were Imad Oil and Gas Ltd., Rahamaniyya Oil & Gas Ltd., Northwest Petroleum and Gas and Conoil Plc.

Also included were Accorn Nigeria Plc, A-Z Petroleum Ltd., Total Plc, Folawiyo Energy Ltd and Integrated Oil & Gas Ltd.

PPPRA noted that there were 128 marketers under the scheme at that time, but added that the 128 cheques paid represented multiple payments legally made to the 15 participants.

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