As EFCC Goes Tough on Major Oil Marketers


Ejiofor Alike takes a look at the EFCC’s recent recovery of the N329 billion debt owed the Nigerian National Petroleum Corporation by eight major oil marketers and NNPC Retail Limited

Concerned about the failure of some oil marketers to remit the monies realised from the sale of petroleum products allocated to them by the Nigerian National Petroleum Corporation (NNPC) between 2010 and 2016, an anonymous petitioner had alerted the Economic and Financial Crimes Commission (EFCC), which immediately swung into action and recovered the several billions of naira belonging to the federal government.
The petitioner had also alleged that about N40 billion had been diverted by the oil firms in connivance with the leadership of the NNPC.

In the course of investigation, the anti-graft agency said it discovered that the eight major marketers were actually indebted to the federal government to the tune of N329billion and had continued to obtain petroleum products from the government without proper payment, in violation of the NNPC/PPMC credit facility regulations.

The indicted oil firms are Oando Plc, NIPCO Oil Plc, OVH Energy Plc, MRS Oil Plc, Forte Oil and Gas Plc, Mobil Plc, Total Plc, NNPC Retail Ltd and PPMC.
The managing directors of the eight oil trading firms were consequently invited to the Kano Zonal Office of the EFCC several months ago and were confronted with the allegations. They were said to have made an undertaking that the monies would be remitted within an agreed period. So far, N329 billion have been recovered, bringing the outstanding indebtedness to about N20.7 billion.

THISDAY’s investigation revealed that by the terms of the commercial transactions between the marketers and the NNPC, the oil traders get product supply from the corporation with commitment to pay within a specified period.
It was, however, gathered that the marketers breached the agreement by not remitting the monies to the NNPC as stipulated in their agreement, thus leading to the accumulation of the huge debt, spanning over a period of six years.

Though the federal government also failed to pay subsidy claims within the stipulated 45 days as contained in the Petroleum Support Fund (PSF), leading to about $2 billion indebtedness to the marketers that accumulated during the subsidy regime, the inability or outright refusal of the marketers to pay for the product allocated to them by the NNPC raised suspicious that the oil traders intended to defraud the federal government.
This suspicion might have also fueled the petition to the anti-graft agency.
An official of one of the affected companies told THISDAY at the weekend that before the intervention of EFCC, the NNPC and the marketers had carried out account reconciliations.

The results of the reconciliations, according to the official, showed that the NNPC is equally indebted to the marketers as the corporation has not supplied the marketers with kerosene, which they paid for between 2010 and 2016.

“You can confirm from your sources among the depot owners – some major marketers and depot owners paid several billions of Naira three to four years ago for kerosene allocations but were not given product. When they asked the NNPC to convert the money they paid for kerosene to petrol, NNPC said that their official policy is against such conversion and they don’t also refund money. So, the companies should continue to wait until anytime their allocations are ready. That means they should continue to pay interest on bank loans that are tied down with the NNPC,” the official added.

But some industry stakeholders faulted the marketers’ claims at the weekend, pointing out that diversion of petroleum products and non-remittance of monies realised from sale of products have been a common occurrence for oil marketers in the country.
“You would recall that this was not the first time oil marketers were indicted for one form of infraction or the other. A few years ago, most of them were linked to subsidy fraud. The anti-graft agency should conduct a thorough investigation into the activities of these oil firms, with a view to uncovering their fraudulent practices”, said an oil industry stakeholder.

He added: “The oil firms claimed the NNPC failed to supply products they paid for. Why did they wait until their indebtedness was exposed, before they started making counterclaims; how much was the value of the products not supplied by the corporation. By failing/refusing to remit the monies six years after, I put it to you they had no intention to repay the debts more so when they were getting allocation from the corporation. These marketers and their cohorts in NNPC should be thoroughly investigated.”

Intervention of Presidency
Apparently frightened by alleged threat by the EFCC to expose their wrong doings, the marketers were said to have approached the acting President, Prof. Yemi Osinbajo and the Chief of Staff to the President, Alhaji Abba Kyari, to prevail on the Commission not to smear their corporate names. They claimed that the debt that arose in the course of normal business transactions.

“The EFCC chairman was not at the meeting but the acting President and the Chief of Staff gave us their words that nobody will smear our names,” an unnamed CEO of one of the indicted firms said.
However, THISDAY could not confirm independently, if the said meeting between the oil marketers and the Presidency actually took place.

But the unnamed CEO told THISDAY at the weekend that when they informed officials of the agency that the NNPC was owing them higher amount of money for products paid for but were not supplied, the officials of the agency told them pointedly that the EFCC’s mandate was to recover government’s money in the hands of the marketers and not to recover the money owed them by the NNPC.

“This thing has been on for up to one year. It was over six months ago that EFCC invited us to Kano. We told them that NNPC also owe us and should net off their money from the debt they owe us. But the EFCC officials told us that they have a mandate to recover government’s money because there is a petition alleging that over N400billion of government’s money was in private hands,” the CEO alleged.

EFCC’s sledge hammer
Last week, the anti-graft commission announced that it had recovered a total of N328.9 billion from the major oil marketers in one year.
Spokesperson of EFCC, Wilson Uwujaren, who made the revelations, acknowledged that the commission had acted on a petition, alleging that N40 billion had been diverted by the major oil marketers in connivance with the leadership of the NNPC and PPMC.

“The EFCC, in a swift reaction, referred the petition to a special task force which swung into action by conducting discrete investigation. Findings by the operatives of the EFCC revealed that the oil marketers were actually indebted to the federal government of Nigeria to the tune of N91.5 billion between 2010 and 2016. Further investigation into the allegation also revealed that the oil marketers had continued to obtain petroleum products from the government without proper payment, in violation of the NNPC/PPMC credit facility regulations.

“A probe of which further led to the discovery of N258.9 billion,” Uwujaren said.
He revealed that a sum of N328.9 billion has been recovered from the major oil marketers out of a total debt of N349.8 billion, adding that the outstanding debt now stands at N20.7 billion.
Some officials of the eight private marketers involved told THISDAY at the weekend that the manner the EFCC went about the announcement had confirmed their worst fears that the commission would smear their corporate reputations by giving the world the impression that they “refunded money that was fraudulently taken from the federal government.”

“They (EFCC) want to kill private sector investment in the downstream sector. They want to stifle the private sector because they know that none of the CEOs or NNPC leadership invited to Kano will speak publicly against them, otherwise why shouldn’t they also consider the money owed the marketers by the NNPC and net it off? One of the marketers paid back less than N20 billion and NNPC is indebted to it to the tune of over N35 billion. Why is EFCC silent on this? The marketers are indebted to the banks because government refused to pay outstanding subsidy claims within 45 days as stipulated in the subsidy scheme. Unfortunately, the marketers don’t have the machinery to go after the NNPC. Investments are going down and most of the tank farms are empty because of these huge debts. Jobs are being lost,” one of the officials explained.

One of the officials also told THISDAY that by not stating the amount owed by each major marketer, the EFCC gave the impression that the eight private marketers refunded a large chunk of the N328.9 billion, when it was the NNPC Retails Limited that allegedly coughed out almost 80 per cent of the N328.9 billion refunded to the federal government.

“The industry works on credits. Even importers import on credit and that is why they are at the mercy of the banks. Both the major marketers, depot owners and the NNPC Retails get supply from NNPC on credit. Accounts reconciliations are done periodically to update the accounts and know who owes who. Why did they refuse to publish the figures paid by each marketer? They should have told the world how much each company refunded so that everybody will know that it was insignificant compared to what NNPC Retails refunded and also compared to what the NNPC owes the marketers,” the official explained.