May 28, 2024

SERAP tells Tinubu to probe $2.1bn, N3.1trn misappropriated fuel allocation or face legal action

The Socio-Economic Rights and Accountability Project, SERAP, has told the federal government of Nigeria to probe the misappropriated fuel revenue and subsidy allocation from 2016 to 2019 or face legal action on failure of transparency and accountability in governance.

SERAP stated this in a statement signed by its Deputy Director, Kolawole Oluwadare, on Saturday May 3, 2023.

According to the statement, “Set up a presidential panel of enquiry to promptly probe the grim allegations that US$2.1 billion and N3.1 trillion public funds of oil revenues and budgeted as fuel subsidy payments are missing and unaccounted for between 2016 and 2019, as documented by the Auditor-General of the Federation.”

It urges the president to hold anybody responsible for the alleged misappropriation of public funds and ensure recovery of any proceeds of crime. The statement also reminds the president of the necessity of justice, transparency and accountability to sustain national progress.

“There is a legitimate public interest in ensuring justice and accountability for these serious allegations. There will be no economic growth or sustainability without accountability for these human rights crimes,” SERAP said.

It added: “Your government should urgently act to follow due process of law in any policy to remove fuel subsidy, ensure that suspected perpetrators of these crimes against Nigerians are brought to justice and full recovery of any missing public funds.”

The statement reads in part, “According to the audited reports between 2016 and 2019 by the Auditor General of the Federation (AGF), the Nigerian National Petroleum Corporation (NNPC) failed to remit N663,896,567,227.58 into the Federation Account. The Auditor-General fears that the money may be missing.”

It also added that the NNPC failed to account for the allocation of crude oil to refineries in 2019. 107,239,436.00 barrels of crude oil were lifted as domestic crude without any document. The Auditor-General fears that the crude valued at N55,891,009,960.63 may have been diverted.

“The NNPC in 2019 also failed to remit N1,955,354,671,268.66 and N55,157,702,848.74 of generated revenues into the Federation Account, contrary to Section 162(1) of the Nigerian Constitution 1999 [as amended]. The Auditor-General fears that the money may have been diverted,” SERAP added.

“The NNPC also failed to account for N4,572,844,962.25 of ‘domestic gas receipts’, thereby ‘reducing the distributable revenue in the Federation account.’ The Auditor-General wants the money remitted.”

“The NNPC also in 2019 failed to account for 22,929.84  litres of PMS pumped from refineries and valued at N7,056,137,180.00. The Auditor-General fears that the PMS may have been diverted.”

“The NNPC also ‘illegally classified’ 239,800 barrels of crude oil valued at N5,498,045,220 as ‘crude oil losses.’ The Auditor-General fears that the crude oil may have been diverted.”

“The Department of Petroleum Resources (DPR) in 2019 also reportedly failed to remit US$1,278,364,595.49 in revenue to the Federation Account. The money was deducted by the NNPC from the Oil and Gas Royalty assessed by the DPR.”

“The DPR in 2019 also deducted N19,840,081.29 as ‘stamp duty’ payments from contractors and consultants but the DPR instantly paid back the money to the contractors and consultants instead of remitting it to the treasury.”

“The DPR in 2019 also paid N137,225,973.35 to contractors and consultants for various contracts and consultancies but failed to deduct stamp duty. The Auditor-General wants the money recovered.”

“The DPR also paid N11,856,088,271.92 as salaries for 2019 but failed to deduct N118,560,882.72 as contribution of 1% Industrial Training Fund (ITF). The DPR in 2019 also failed to transfer US$35,738,342.95 year balance. The Auditor-General wants the money recovered and remitted.”

“The DPR in 2018 also withdrew without any explanation US$759,387,755.10 from DPR Signature Bonus Account rather than paid the money into the Federation Account.”

“Subsidy records show that N443,940,559,974.80 was paid as total subsidy for 2016 but the money was not budgeted for. The payments were for outstanding Petroleum Support Fund (PSF) commitments for year 2015.”

“However, there was no payment in 2016. Only outstanding payments for previous years 2014 and 2015 and interest payments were made in 2016.”

“The Auditor-General fears that the oil marketers that received the subsidy payments may not have been ‘eligible to draw from the Petroleum Support Fund as the Petroleum Products Pricing and Regulatory Authority (PPPRA) failed to provide any document on the payments.”

“N39,141,210,181.74 was also paid from the Federation Account in 2016 to different Oil Marketers in 26 transactions, being Payments of Interest and Foreign Exchange Differential on Subsidy but without any document.”

“The NNPC also made ‘zero profit’ and recorded ‘losses from its joint ventures in 2016. This is contrary to expectations that profits should be made from the joint ventures.”

“The Ministry of Petroleum Resources, Abuja in 2016 paid N14,490,000.00 for the supply of 3 Nissan Almera Saloon vehicles 1.5 to the Ministry without proper documentation. The purchase of ‘the vehicles were made through direct procurement without competitive bidding by at least three companies, as required by Financial Regulations. There was no advertisement and bidding for this contract.”

“Although ‘N12,442,500.00 was approved by the Bureau of Public Procurement for the vehicles, the Ministry made an overpayment of N2,047,500.00 to the car company “

SERAP also emphasized the need for President Tinubu to address all the past corrupt practices in the oil sector for equity and justice establishment between the rich and the poor.

“Arbitrarily removing fuel subsidy without addressing outstanding accountability issues in the alleged mismanagement of oil revenues and fuel subsidy payments would amount to punishing poverty and further impoverishing the poor while letting high-profile officials and non-state actors get away with their crimes.”

“Allegations of corruption in oil revenues and fuel subsidy payments suggest that the poor have rarely benefited from the use and management of the revenues and payments.”

“Poor and socio-economically vulnerable Nigerians should not be made to continue to pay the price for the stealing of the country’s oil wealth while state and non-state actors pocket public funds.”

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