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Subsidy Probe: House Adopts 29 Recommendations

The Federal House of Representatives on Tuesday held an extensive session to consider the report of its committee that probed the management of subsidy regime, adopting 29 of the total 60 of its recommendations and amending six.
The lower legislative chamber considered 35 of the ad hoc committee’s recommendations after moving from plenary into the committee sessions presided over by deputy speaker, Emeka Ihedioha.
Chairman of the ad-hoc committee, Farouk Lawan, opened the session with an opening address, during which he lamented that sharp practices, which had been ongoing in the industry for years, had led to massive short-changing of the citizenry. He added that investigations revealed gross mismanagement of the subsidy by the Nigerian National Petroleum Corporation (NNPC) and Petroleum Products Pricing Regulatory Agency (PPPRA).
He said his committee executed the assignment with utmost fairness and a high sense of responsibility, as all individuals and agencies relevant to the matter were invited. He also revealed that one of the many financial misappropriations unearthed was the transfer of N999m 128 times in 24 hours.
“It was an exercise conducted under immense pressure but it will help the nation,” Lawan said, urging the House to adopt his committee’s recommendations. “I urge you to dispassionately and objectively look at the recommendations in this report and to adopt same, as Nigerians are watching.”
The presiding officer of the committee of whole then asked that the recommendations be debated one after the other. The first three recommendations were unanimously adopted by the lawmakers.
The fifth recommendation of the report was the first to be amended. Samson Osagie argued that the clause, asking for the audit of NNPC, was open-ended; and proposed an amendment as thus: “that the House hereby directs that the NNPC should be audited within three months by the Auditor-General of the Federation to determine its solvency.”
Femi Gbajabiamila opposed the motion for a government official to supervise the auditing, instead preferring the allocation of the task to the Public Accounts Committee or an independent audit firm.
However, chairman of the Public Accounts Committee, Adeola Olalekan explained to the House that all agencies of the federal government are audited by external firms. He said that in the case of NNPC, the committee has received audited accounts up to 2008, advising the House to mandate the office of the AGF to carry out the audit of NNPC from 2009 till date.
The House, therefore, amended the recommendation and mandated the AGF to audit NNPC’s account up to date, within the next three months.
Hon. Abike Dabiri-Erewa moved a motion to amend the eighth recommendation, which asked NNPC to refund N25b to the treasury. The initial report did not give a time frame for the refund, so her motion that the refund be made within three months was adopted and the recommendation so amended. The House also approved the recommendation that the NNPC should be unbundled and its management and board overhauled.
The 25th recommendation which insisted that the 17 oil marketers that benefitted from the fuel subsidy fund but failed to either submit documents or appear before the probe committee should be sanctioned was arguably the most hotly debated.
The chairman of the House of Representative Committee on Justice, Ali Ahmed noted that since the House has powers to compel attendance of any person or organisation at a hearing, the companies should be given a second chance to appear before the ad hoc committee, for the sake of fair hearing. But he advised the House to sanction the companies on the criminal allegations levelled against them. His recommendation was adopted and the recommendation was so amended.
The 17 companies are Mut-Hass Petroleum, Nepal Oil and Gas Service, Oilbath Nigeria, Techno Oil Ltd, Somerset Energy Services, Stonebridge Oil Ltd, Mobil Oil Nigeria, AX Energy Ltd and CAH resources Association Ltd. Others are Crust Energy Ltd, Fresh Synergy Ltd, Ibafon Oil Ltd, Lottoji Oil, Gas Ltd, Oakfield Synergy Network Ltd, Petro Trade Energy and Service Ltd and Rocky Energy. The committee had recommended that the companies be compelled by anti-corruption agencies to jointly refund N41.936b.
The 15 companies that obtained forex but failed to import petroleum products were not so lucky, as they were asked to refund over N300m.
Among the approved recommendations is the prosecution of the chairman of the board of Petroleum Products Pricing Regulatory Agency (PPPRA) from 2009 to 2011, Dr. Ahmadu Ali, and the entire members of the board during the period.
It further approved that “the executive secretaries of PPPRA, under whose watch these abuses that led to the loss billions of naira were perpetrated should be held liable.” The anti corruption agencies have been directed to act accordingly.
The lawmakers also approved the reorganisation of the ministry of petroleum resources by the president, such that two ministers are appointed to manage the upstream and downstream sectors.
The House equally recommended “the immediate reinstatement of subsidy for kerosene not later than the second quarter of 2012 at the pump price of N50 per litre.”
Before the commencement of the debate on the report, Tambuwal in an address said the oil sector was neither a secret society nor sacred cow, and vowed that the House was determined to restore sanity to it.
He disagreed with the country’s anti-corruption agencies, which he said were waiting for a harmonised version of the report before taking any action.
“Let me quickly say here that this is at best an excuse that cannot stand, after all the same agencies accept and investigate petitions from individuals, how much more resolutions of this House,” he said. “There will be no such document so they should just go ahead and do their job; and where they find any person or body culpable, they should proceed in accordance with the law.”
He commended the committee for its “courage, dedication and professionalism,” noting that “the probe of the oil sector has raised so much dust from certain segments of the polity such that it became clear that the intention was to frustrate it.”

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