Bola Tinubu 1

SERAP Calls on Bola Tinubu to probe Oil Subsidy Payments

Bola Tinubu has been requested by the Socio-Economic Rights and Accountability Project (SERAP) to look into claims of revenues from oil sales.

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SERAP has requested Bola Ahmed “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.”

The group demanded that he “name and shame anyone suspected to be responsible for the alleged widespread and systemic corruption in the use of oil revenues and the management of public funds budgeted as fuel subsidy and to ensure their effective prosecution as well as the full recovery of any proceeds of crime.”

Furthermore, it urged him “to swiftly, completely, independently, transparently and effectively investigate all fuel subsidies paid by successive governments since the restoration of democracy in 1999, and to use any recovered proceeds of crime as palliatives to address the impact of any subsidy removal on poor Nigerians.”

There is a legitimate public interest in securing justice and accountability for these severe claims, the organization stated in a letter dated June 3, 2023 and signed by SERAP deputy director Kolawole Oluwadare. Without holding those responsible for these violations of human rights accountable, there will be no sustainable economic progress.

“Your government should immediately take action to follow due process of law in any policy to remove fuel subsidies, ensure that suspected offenders of these crimes against Nigerians are brought to justice, and fully recover any missing public funds,” the letter reads.

In a statement, SERAP warned that unilaterally eliminating fuel subsidies “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.”

The letter stated, in part, that any reduction in gasoline subsidies should not be utilized as a means of keeping the people in poverty while allowing those who are accused of stealing oil profits and fuel subsidy payments to preserve their ill-gotten gains.

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

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 deposit N663,896,567,227.58 into the Federation Account, the statement continued. The Auditor-General worries that the funds might have vanished.

Additionally, it has been claimed that the NNPC did not account for the allocation of crude oil to refineries in 2019. Without any documentation, 107,239,436.00 barrels of domestic crude were lifted. The Auditor-General is concerned that the crude, which is worth N55,891,009,960.63, may have been misappropriated.

In violation of Section 162(1) of the Nigerian Constitution 1999 (as amended), the NNPC failed to deposit N1,955,354,671,268.66 and N55,157,702,848.74 in generated income into the Federation Account in 2019. The Auditor-General worries that the funds might have been misappropriated.

Additionally, N4,572,844,962.25 in “domestic gas receipts” were not accounted for by the NNPC, which “reduced the distributable revenue in the Federation account.” The Auditor-General requests that the funds be sent.

The NNPC did not account for 22,929.84 litres of PMS that were pumped from refineries in 2019 and were worth N7,056,137,180.00. The Auditor-General worries that there may have been a diversion of the PMS.

A further 239,800 barrels of crude oil worth N5,498,045,220 were “illegally classified” by the NNPC as “crude oil losses.” The Auditor-General worries that there may have been a diversion of the crude oil.

According to reports, the Department of Petroleum Resources (DPR) failed to transfer US$1,278,364,595.49 in earnings to the Federation Account in 2019. The money was taken out of the oil and gas royalties that the DPR evaluated and paid to the NNPC.

“In 2019, the DPR also withheld N19,840,081.29 from consultants and contractors as “stamp duty” payments, but the DPR immediately returned the money to the consultants and contractors rather than sending it to the treasury.

“The DPR also paid contractors and consultants N137,225,973.35 in 2019 for a variety of contracts and consultancies, but failed to remove stamp duty. The Auditor-General desires to recover the funds.

“The DPR also paid N11,856,088,271.92 in salary for 2019, but failed to deduct N118,560,882.72 as a 1% Industrial Training Fund (ITF) payment. The DPR failed to transfer the $35,738,342.95 year balance in 2019. The Auditor-General requests that the funds be recovered and transferred.

“The DPR also withdrew US$759,387,755.10 from the DPR Signature Bonus Account in 2018 without providing any justification and did not transfer the funds to the Federation Account.

“Supply records indicate that N443,940,559,974.80 in total subsidies was paid in 2016, yet the funds were not budgeted for. Payments were made for 2015 Petroleum Support Fund (PSF) commitments that were yet unfulfilled.

But in 2016, there was no payment. In 2016, just interest payments and remaining payments for the years 2014 and 2015 were made.

“The Auditor-General worries that oil marketers who received 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.'”

The Federation Account also paid N39,141,210,181.74 to various oil marketers in 26 transactions in 2016, including payments of interest and foreign exchange differential on subsidies but without any supporting documentation.

“The NNPC also reported ‘losses from its joint ventures’ and ‘zero profit’ for 2016. This goes against the notion that the joint ventures should generate profits.