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Senate Uncovers N10tr Fraud in NNPC

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Senate Uncovers N10tr Fraud in NNPC

Senate Uncovers N10tr Fraud in NNPC

By Modupe Gbadeyanka

An alleged fraud of about N10 trillion in the oil and gas sector has been unearthed by the Joint Senate Committee on Petroleum (Downstream, Upstream) and Gas.

According to the committee, the alleged fraud was perpetrated by officials of the Nigerian National Petroleum Corporation (NNPC) in connivance with some independent marketers and other key players in the petroleum industry between 2006 and 2016.

To get to the root of this mess, the committee said it would carry out a holistic investigation of the fraud with a view to bringing perpetrators to book, having secured the strong support of President Muhammadu Buhari and the leadership of the Senate.

Addressing newsmen at the weekend in Abuja, the committee said available records before it showed that during the period under investigation, NNPC imported fuel that was more than 40 percent of the local consumption besides the perceived gross underutilisation of 445,000 barrels it allegedly received for local refining and local consumption on yearly basis.

At the briefing, Chairman of the Senate Committee on Petroleum (Downstream), Mr Kabiru Marafa, noted that N5.2 trillion of the entire sum was traceable to NNPC which he said was collected by the corporation as subsidy from the Federal Government for the importation of petroleum products, notably between 2006 and 2016.

He said the amount excluded monies realisable from the 445,000 barrels of crude oil allocated to it annually for production in the nation’s refineries for local consumption.

According to him, NNPC, being the custodian of crude oil resources of the nation, responsible for 51 percent of petroleum products’ importation into the country over the years, aside the 445,000 crude allocation it gives itself on a yearly basis for sales for local refining, must account for the N5.2trillion.

“Available records show that it has spent on subsidy on its own, 51 percent of petroleum products importation between 2006 and 2016 aside the N3.8 trillion spent on similar subsidy for independent marketers and about $1.5 billion yet to be accounted for by other key players in the industry,” Mr Marafa said.

The lawmaker stated further that the committee had discovered how oil marketers fraudulently evacuated petroleum products from storage leased by NNPC without any sense of accountability, pointing out that at least 100 million litres of petrol worth N14 billion had been stolen by two different oil companies without any sanction imposed on them by the NNPC.

He, therefore, ordered the NNPC to sanction the affected companies this week or face huge embarrassment following the expose.

“This committee has established the missing of 100 million litres of PMS from such storage arrangement.

“We expected NNPC to have taken action against the two companies that carried out the theft but since it has not, we hereby order it to do so immediately, precisely within this week, failure of which we shall make the whole details known to the public,” he threatened.

Mr Marafa also threatened that all the key players in the sector along with their collaborators who had taken the country for a ride during the period under review must be brought to book, explaining that the fraud was largely perpetrated during the administrations of former Presidents Olusegun Obasanjo, Umaru Musa Yar’Adua, Goodluck Jonathan and partly during the current administration of Buhari.

“President Buhari is highly supportive of this move by the Senate and we shall not fail in carrying out the needed holistic investigation on obvious sharp practices in the sector. Needed documents for the onerous task are already in our possession,” he said.

Against this background, he said a three-day public hearing would soon be conducted by the committee as he listed those expected at the hearing to include: present and past executives of NNPC, independent marketers, heads of Licenced Inspection Agency, Nigeria Ports Authority (NPA), Federal Inland Revenue Service (FIRS), Nigeria Customs Service, and NIMASA, among others.

The lawmaker said that the whistle blower approach being adopted by the executive to unravel fraudulent practices of corrupt public officials would also be used to fish out those involved in the oil sector’s massive fraud.

He said the committee would ensure that strict sanctions were imposed on players in the sector who might attempt to frustrate the investigation by failing to co-operate with the committee during its investigation.

Additional information from ThisDay.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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Economy

Introduction of Capital Gains Tax Could Discourage Investors—Popoola

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capital gains tax

By Aduragbemi Omiyale

As part of efforts to raise more funds for the provision of critical infrastructure in the country, the federal government recently introduced the capital gains tax.

This was embedded in the 2021 Finance Act and it required the payment of capital gains tax on transactions worth over N100 million.

The chief executive of the Nigerian Exchange (NGX) Limited, Mr Temi Popoola, applauded this initiative of the government but warned that it could discourage investors, especially the high net-worth individuals (HNIs) and institutional investors, who carried out such heavy deals.

Mr Popoola, who spoke a few months ago at the Nigerian Economic Summit Group (NESG) Fiscal Policy Roundtable, called for a balance.

He admitted that the capital gains tax is in line with the government’s drive towards an increased tax bracket but was only worried about the adverse effect the laudable policy could have on the economy in the long run.

However, Mr Popoola commended the economic policy direction of the administration of President Muhammadu Buhari, noting that it was an indication of the government’s commitment to driving non-oil revenues into the country.

The NGX chief said the tenets of the 2021 Finance Act brought a lot more clarity on investment such as the Real Estate Investment Trust (REIT), Capital Gain Tax (CGT) and securities lending transactions.

According to him, investing in real estate investment brings a lot of potential gains and “if you look at our market today, all our assets class has helped to boost investors’ confidence.”

He stated that the Finance Act will boost the capital market and the economy, reiterating NGX’s commitment to adhering to government policy and driving growth in the capital market.

However, he further stressed that the introduction of excise taxes on non-alcoholic beverages and the education tax could also affect the economy.

According to him, these taxes could hamper the ability of companies affected by these developments to raise capital and pay dividends to investors because the policies are coming at a time the economy was undergoing a recovery.

Business Post reports that the event, which precisely took place in March 2022, was put together by NESG to access the impact of the 2021 Finance Act on the economy.

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Economy

Inflation in Nigeria Jumps to 16.82% in April 2022

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inflation rate Nigeria

By Aduragbemi Omiyale

The National Bureau of Statistics (NBS) on Tuesday disclosed that inflation in Nigeria increased by 16.82 per cent in April 2022 from the 15.92 per cent recorded in March 2022.

However, on a year-on-year basis, the rate moderated by 1.3 per cent as inflation was 18.12 per cent in the corresponding month of 2021.

The NBS disclosed that the percentage change in the average composite consumer price index (CPI) for the 12 months period ending April 2022 over the average of the CPI for the previous 12 months period was 16.45 per cent, 0.1 per cent lower than the 16.54 per cent recorded in March 2022.

It also stated that in the month under review, the urban inflation rate increased to 17.35 per cent (year-on-year) in April 2022 from 18.68 per cent recorded in April 2021, while the rural inflation rate increased to 16.32 per cent in April 2022 from 17.57 per cent in April 2021.

On a month-on-month basis, the urban index rose to 1.78 per cent in April 2022, up by 0.02 from the rate recorded in March 2022 at 1.76 per cent, while the rural index also rose to 1.74 per cent in April 2022, up by 0.01 from the rate that was recorded in March 2022 at 1.73 per cent.

The corresponding 12-month year-on-year average percentage change for the urban index is 17.01 per cent in April 2022, lower than 17.10 per cent reported in March 2022, while the corresponding rural inflation rate in April 2022 is 15.91 per cent compared to 16.00 per cent recorded in March 2022.

In the report, the stats agency said in April 2022, the composite food index rose by 18.37 per cent in contrast to the 22.72 per cent achieved in April 2021, attributing the increase to a hike in the prices of bread and cereals, food products n.e.c, potatoes, yam, and other tubers, wine, fish, meat, and oils.

On a month-on-month basis, the food sub-index increased to 2.00 per cent in April 2022, up by 0.01 per cent points from 1.99 per cent recorded in March 2022, the report added.

It was further stated that the average annual rate of change of the food sub-index for the 12-month period ending April 2022 over the previous 12-month average is 18.88 per cent, 0.34 per cent points from the average annual rate of change recorded in March 2022 at 19.21 per cent.

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Economy

OTC Securities Exchange Closes 0.02% Lower

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NASD OTC Securities Exchange

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange closed marginally lower by 0.02 per cent on Monday on the back of a price depreciation in Central Securities Clearing Systems (CSCS) Plc.

The stock, which was the only price loser yesterday, went down by 5 kobo or 0.29 per cent to sell at N16.95 per unit compared to the previous session’s N17.00 per unit.

At the close of transactions, it reduced the market capitalisation of the OTC securities exchange by N250 million to N1.05 trillion from N1.06 trillion and sliced the NASD Unlisted Securities Index (NSI) by 0.19 points to 807.56 points from 807.75 points.

Business Post observed that the level of activity during the session was low as the volume of securities recorded a decline of 99.8 per cent to 61,131 units from 7.5 million units, the value of trades also depreciated by 99.8 per cent to N4.6 million from N2.2 billion, while the number of deals remained unchanged at 11 deals.

AG Mortgage Bank Plc closed the session as the most traded stock by volume (year-to-date) with 2.3 billion units worth N1.2 billion, CSCS Plc was in second place with 661.6 million units worth N13.9 billion, while Food Concepts Plc held the third position with 94 million units worth N77.8 million.

But the most active stock by value (year-to-date) was CSCS Plc with 661.6 million units valued at N13.9 billion, VFD Group followed with 9.4 million units valued at N2.9 billion, and AG Mortgage Bank Plc with 2.3 billion units valued at N1.2 billion.

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