- House summons Kachikwu, Baru over fuel subsidy payments
- Senate rejects report for silence on payments
Barely two months after it announced the end of its ceasefire last November, the Niger Delta Avengers wednesday again warned the federal government to brace up for another round of attacks that it would soon unleash on oil and gas facilities in the country.
The militant group has also stated that with the recent killings across the country, the time was ripe for the restructuring of the country, adding that anybody who is against restructuring is an enemy of this country and particularly an enemy of the Niger Delta Avengers.
In a statement posted wednesday on its website by its spokesperson, “Maj.-Gen.” Murdoch Agbinibo, the militant group, which wrecked havoc on oil facilities in 2016 and helped to precipitate Nigeria’s plunge into a recession, stated that it had concluded arrangements to carry out deadly attacks in a few days time.
The group said it would be targeting the deep sea operations of the international oil companies (IOCs) and others littered across the deep waters of the Niger Delta region.
NDA also cautioned the operators of the Egina Floating Production Storage Offloading (FPSO) vessel, which is sailing to Nigeria from South Korea, to let the facility stay where ever it is, warning that it is tracking the movement of the vessel.
The militant group stated that it had resolved that the killings and division currently playing out in Nigeria along divergent grounds make this period the perfect time to restructure the country.
“While promising a brutal outpouring of our wrath, which shall shake the coffers of the failed Nigerian nation, our demand unambiguously is for the government to restructure the country.
“On the 3rd of November 2017 we promised to reactivate ‘operation red economy’ but as usual some overzealous and over-patriotic elders intervened and appealed as they have done twice before for us to avail them some more time to attend to the demands of the Niger Delta as championed by the Niger Delta Avengers,” the group said.
The group noted that the oil-rich region has not achieved any meaningful results despite the opportunities, stressing that the Niger Delta elders were either irresponsible or the Nigerian government was not sincere with them, “as is their trade in stock”.
It stated that anybody against restructuring is an enemy of this country, warning that it will not rest until such enemies are defeated by the Niger Delta people who earnestly seek to control their own resources.
NDA said that while $1 billion from the Excess Crude Account has been earmarked for release to fight the Boko Haram insurgency in the North-east, successive governments had ignored the challenges facing the Niger Delta from which the $1 billion was generated.
It accused the federal government of deriving pleasure in “sending their unprofessional and weak military to invade our communities and subject our already sick and suffering people to more hardship and poverty”.
“Only a few days ago, the Nigerian Army released 244 members of the murderous Boko Haram sect to the Borno State Government while thousands of innocent Niger Delta youths continue to suffer in various prisons across the country for no just cause,” the group added.
It called for the immediate release of all Niger Delta activists and freedom fighters still held captive by the Nigeria Armed Forces.
The militant group had launched its presence in the country in February 2016, when it carried out an attack on the Trans-Forcados pipeline, the first subsea attack on oil and gas installations in the country.
The incident had forced Shell to declare force majeure on liftings of the Forcados grade of crude oil.
Companies hit by the attack included Shell, Seplat Petroleum Development Company Plc, Shoreline Resources Limited, Neconde, First Hydrocarbon Nigeria (FHN) and NPDC.
Some marginal field producers such as Pillar Oil, Midwestern Oil and Gas, Platform Petroleum and Energia were also affected and reduced some of the affected companies’ oil production to zero for most of 2016.
Before it declared a ceasefire, the NDA had carried out a wave of attacks on oil facilities in 2016 that disrupted the production of 1 million barrels per day (mbpd) from the country’s output, which was then close to 2.3mbpd.
House Summons Kachikwu, Baru
Meanwhile, barely 24 hours after the Speaker of the House of Representatives, Hon. Yakubu Dogara vowed to investigate the resurgence of fuel subsidy payments by the federal government, the lower legislative chamber yesterday passed a motion mandating the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru to appear before the House Committees on Finance and Petroleum (Downstream) to explain the current subsidy payments by the corporation.
It further resolved that Kachiku and Baru as well as the Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA) must appear before the committee to account for the monies spent on subsidy payments since January 2017 to date and the current petrol pricing regime.
The House further urged the executive to make provisions for subsidy payments in the 2018 Appropriation Bill, if it found it necessary to continue subsidies under any guise whatsoever.
The resolution of the House was consequent to a motion sponsored by Hon. Sunday Karimi (PDP, Kogi) on the urgent need to investigate the fuel subsidy payments by NNPC to itself and oil marketers through deductions from oil revenues.
He said such payments constituted a constitutional breach and an impeachable offence, stressing that the executive cannot choose which aspect of the Constitution to obey.
He recalled that in 2017, Vice-President Yemi Osinbajo and Kachikwu had both admitted that the current landing cost of petrol was N171 per litre, despite the fact that the federal government had pegged the price of petrol at N145 per litre.
He said at the moment, it is the NNPC paying for the cost or differential of N26 per litre, despite the executive’s stance that it had removed petrol subsidies, adding that there was no parliamentary appropriation for subsidy payments in the 2017 budget.
In his lead debate, Karimi further said that the NNPC had earlier last year conceded that fuel subsidies had returned because between January and March 2017 alone, the corporation recorded an “under recovery” of N46.86 billion.
The trend continued at an increasing rate all through 2017, the lawmaker posited.
He said as of December 2017, over N300 billion had been expended on petrol subsidy and the recoveries continue to date.
Karimi said the under recovery in the downstream marketing of petrol implied that the expected open market price of petrol which includes the cost of importation and distribution such as marketers margins, landing costs and freight cost, was above the approved retail price, and the NNPC had been absorbing the extra cost and paying subsidies to itself.
According to him, the under recovery was caused by the increase in the price of crude oil in the international market from about $28 per barrel in 2016 to $50 per barrel in 2017 and $70 per barrel currently.
He noted that the increase in the price of crude oil, depreciated naira and the associated difficulty in accessing foreign exchange had caused marketers to discontinue petrol importation.
Also citing the relevant sections of the Constitution, he argued that payment of subsidy by the NNPC without appropriation or consent of the National Assembly was illegal and unconstitutional.
He noted that the 2018 Appropriation Bill does not include any provision for subsidy payments.
The lawmakers were unanimous that non-appropriated spending on subsidy, no matter how well intended, was illegal and susceptible to corruption, embezzlement and mismanagement if not subjected to approval and scrutiny by parliament.
They further expressed concern over claims by the executive that it had ended the subsidy regime and that it was the NNPC which was paying the subsidy through its routine trading activities and as such does not require budgetary approval or recourse to parliament.
Contributing to the debate, Hon. Mohammed Monguno (APC, Borno), referring to the relevant sections of the Constitution said the disbursement of funds such as petrol subsidy payments without recourse to the National Assembly was a clear breach of the Constitution.
Also, House Minority Whip, Hon. Barde Yakubu (PDP, Kaduna) said the subsidy regime had been found to favour only the rich at the expense of the masses.
He said it was wrong for the federal government to bring back subsidy payments, which had reportedly been discontinued since 2016, especially without the approval of the National Assembly.
He further expressed concern that persons indicted in the 2012 subsidy scandal probe were still going about their businesses with impunity.
At that point, Dogara sought clarification from the mover of the motion who had said subsidy payments were being made to marketers who had suspended importation because of the impact of rising crude prices and the problems associated with the foreign exchange shortages.
However, Deputy Chief Whip, Hon. Pally Iriase (APC, Edo) cautioned against whipping up sentiments on the issue.
He said until the matter was investigated, it would be wrong to conclude that the NNPC pays subsidy to itself.
But Hon. Aminu Shehu Shagari (APC, Sokoto) said he had obtained a confession from an impeccable source in the oil industry that subsidy payments were being made.
Also contributing, Hon. Ahmed Pategi (APC, Kwara) said the corporation could have been paying itself subsidy, given that it is currently the only entity importing petroleum products into the country.
He said: “This is why this investigation must take place. Let’s set up an ad hoc committee. Let’s carry out our oversight functions. NNPC is one agency which spends without parliamentary approvals. We must insist that the NNPC budget must be brought before parliament for the first time.”
At this point, Hon. Akinlaja Joseph (PDP, Ondo) sought to clarify that the alleged N300 billion subsidy disbursement to marketers was actually the arrears owed them by the previous administration.
At this point, Dogara asked Akinlaja, who is the Chairman, House Committee on Petroleum (Downstream), if the said arrears were provided for in the budget and how it had been paid.
Akinlaja responded that it was not budgeted for in the 2017 budget.
However, Hon. Hassan Abubakar (APC, Jigawa) clarified that none other than NNPC was importing petrol but attention should be focused on the landing cost of the product, adding that the PPPRA’s computation of the landing cost remained unclear.
Senate Rejects Report
But as the House debated the existence or lack thereof of a subsidy regime for petrol consumption in the country, the Senate yesterday rejected the report of its Committee on Petroleum (Downstream) on the investigation into the recent fuel scarcity for being silent on the payment of subsidies arising from differential between the landing cost of the product and the approved pump price.
The upper legislative chamber reassigned the subsidy probe to its Public Accounts Committee (PAC).
It, however, mandated the petroleum (downstream) committee chaired by Senator Kabiru Marafa to investigate allegations that a surplus of 5.9 billion litres of petrol could not be accounted for.
The rejection of the report was as a result of observations by senators that the committee’s findings and recommendations were completely silent on subsidy payments allegedly paid by the NNPC to itself and oil marketers.
At the January 4 public hearing on the fuel scarcity, the committee had shied away from dealing with subsidy payments, after Marafa at a pre-event briefing had said the issue of subsidy would not be discussed.
Some senators on the committee including Senators Donald Alasoadura (Chairman, Petroleum Upstream) and Bassey Akpan (Chairman, Gas) had asked specific questions on the subsidy payments, but Marafa had instructed NNPC officials not to respond to the questions.
Senators wednesday therefore took turns to fault the report, leading to the non-adoption of any of the12 recommendations contained therein.
Senator Ali Aidoko (Kogi, APC) observed that the fundamental issue, according to the oil marketers, was that of subsidy.
“But the committee is telling us they did not discuss subsidy. There are differentials and the committee was silent on them. This looks like a report of the NNPC,” he said.
Senator Nafada Bayero (Kano, APC) also faulted all the recommendations of the committee except one calling for full deregulation of the downstream sector.
He cautioned that approving a special foreign exchange regime for marketers lower than the Central Bank of Nigeria rate of N305 to the USD$1, would amount to another form of subsidy.
Nafada added that granting waivers to marketers on payment of Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), Nigeria Customs Service (NCS) and other charges listed in the petroleum pricing template, as contained in the committee’s recommendation, would be unconstitutional.
“It looks like a report that was imported to the Senate. The committee should go back and bring its own report, not the one written for it,” Nafada said.
Similarly, Senator Dino Melaye (Kogi, APC), in his contribution, said the report, if adopted, would serve to continue to further entrench and “energise” the corruption in the oil industry.
“It is unlawful for any government to spend government money without appropriation. As we speak, monies are being released without appropriation. Go back, sit down and do a holy exercise,” he said.
Minority Leader, Senator Godswill Akpabio (Akwa Ibom, PDP), Senator Adeola Olamilekan (Lagos, APC) and Senator Stella Oduah (Anambra, PDP) all cautioned that adopting the report would impugn the integrity of the Senate.
But in defending the report, which was signed by 13 out of the committee’s 23 members, Marafa said it was an interim report and did not have the probe into subsidy payments as one of its mandates.
He also maintained that probing the missing petrol was a necessary pre-condition to ascertaining the quantity for which subsidies may have been paid.
He revealed that NNPC imports 1,206,900,000 litres of petrol monthly at an average consumption of 35 million litres daily.
“NNPC said the country consumed between 27-30 million litres/day from January to September and 30-40 million litres/day from September to December.
“The marketers, on the other hand, received from the government about N1,669,180,182 at the CBN rate of N305 to a dollar to import petrol from January to August 2017.
“This means that the marketers were supposed to bring into the country about 3.8 billion litres of petrol at a landing cost of N133 a litre. In other words, marketers’ imports were supposed to serve the country for about 109 days at 35 million litres a day in 2017.
“The implication is that NNPC has five days surplus every month, 60 days surplus in a year, which if added to the marketers’ 109 days supply, gives a total of 169 days surplus at 35 million litres/day or 5.9 billion litres.
“The question is who consumed this surplus before we ask of subsidy payments,” Marafa explained.
It was therefore necessary, he said, to determine the status of the surplus 5.9 billion litres, when considering that the country experienced acute scarcity during the festive season.
Presiding, Senate President Bukola Saraki recommended that the issue of subsidy payments should be separated from the unaccounted 5.9 billion litres of petrol and shortages still afflicting some parts of the country.
He observed that the committee had focused on a bigger fraud, as the volume of petrol allegedly consumed daily may be untrue.
“And the country is paying for it,” Saraki said.
He therefore directed the Marafa committee to review its report and investigate the unaccounted petrol and the lingering scarcity.
However, during a press briefing after plenary, Marafa attributed the insistence by his colleagues on probing the subsidy payments to political sentiments.
“I respect their opinion, but the chamber is home to different shades and manner of persons, but I stand by my report.
“Today the APC (All Progressives Congress) is in power and some people are not happy about it. You cannot be talking about N26 subsidy when you do not even know what you consume.
“I thank them for their contributions and condemnations, but it’s all politics. Today because APC is in power, everybody wants to talk about it (subsidy), but I will not do it. I will establish the unaccounted 5.9 billion litres first,” Marafa stated.
Except for Akpabio and Oduah, all the senators who thrashed the report, were of APC extraction, same as Marafa himself.