THE Federal Government is apparently set to recover about N1.3 trillion owed it by the Nigerian National Petroleum Corporation (NNPC) and other multinational oil companies.
President Goodluck Jonathan hinted at this in Uyo, the Akwa Ibom State capital at the weekend while opening a retreat for the newly reconstituted Board of the Nigeria Extractive Industries Transparency Initiative (NEITI).
Besides, the activities of petroleum pipelines vandals are not only depriving the government of about N105 billion on a yearly basis, it is playing a major disruption to domestic fuel supply. The Guardian learnt that the presidency was worried about these developments. The Federal Government's bid to recover its debt owed by the NNPC was contained in a statement issued at the end of the NEITI retreat, which was obtained by The Guardian in Abuja at the weekend.
The statement quoted the President as pledging that an inter-ministerial task team would be charged with the responsibility of ensuring the full implementation of NEITI audit report findings.
President Jonathan stated that the task team would comprise high-ranking government officials as well as government agencies that are saddled with either the responsibility of collecting or managing Nigeria's oil and gas revenue.
Jonathan described NEITI as an important anti-corruption agency in the oil and gas sector whose report, findings and recommendations should be implemented to set the tone for the oil and gas sector.
The President again re-assured the nation that his administration has no intention to "cover up any ascertained misdeeds revealed by various fact-finding panels and probes in the extractive industry."
He added that to underline the commitment of his administration to transparency and accountability especially in the extractive industries, "we willingly initiated and submitted ourselves to public scrutiny through several fact-finding panels and objective criticisms. Let me restate the point that my administration has no intention whatsoever to cover up any ascertained misdeeds revealed by these exercise."
President Jonathan also disclosed that he had given necessary directives to all Ministries, Agencies and Departments of government and all companies covered by NEITI activities that NEITI should be given "open and unrestricted support" to carry out its statutory functions in view of the strategic importance of the role of NEITI to the transformation agenda."
Also speaking at the workshop, the Executive Secretary of NEITI, Mrs. Zainab Ahmed disclosed that NEITI's latest industry audit reports in the oil and gas sector that covered the period 2009 to 2011 and the first NEITI audit report in the solid minerals, which covered 2007 to 2010 would be released to the public simultaneously before the end of the year.
The Chair of NEITI Board, Ledum Mitee, said NEITI would henceforth fully exercise its power under Section 3(f) of the NEITI Act that requires it to monitor and ensure that all payments due to the Federal Government from all extractive industry companies, including taxes, royalties, dividends, bonuses, penalties, levies and such like, are duly made.
He added: "For example, previous NEITI audit reports have identified potential revenue loss due to under-assessments/underpayments by covered entities amounting to over $9.8 billion or N1.3 trillion naira by the existing exchange rate. NEITI can no longer sit down and watch and allow these recoverable funds in the hands of the companies at a time the Federal Government is searching for funds to finance the deficits in the annual budgets."
He read the riot act to defaulters, saying no entity would be spared the full weight of the law in case of defaults.
He said that the body would "invoke relevant sanctions under Section 16 of the NEITI against any company found to have rendered false information or failed to provide statements of accounts as at and when due to NEITI Industry Auditors especially in the reported cases where this resulted in under-payments and under-assessments and huge revenue loss to the Federation Account."
Mitee stated that the relevant statutory sanctions should be invoked against relevant government agencies identified to have willingly frustrated the implementation of remedial issues in NEITI audit reports over the years.
Mitee sought the collaboration of anti-corruption agencies in the renewed bid at ensuring complying with the provisions of the law and enthronement of accountability and transparency in the nation's oil and gas sector.
Oil pipelines have been under repeated attacks with major stakeholders such as the NNPC making passionate appeals to the security agencies to help protect the pipelines.
The government's worry about pipelines' vandalism is coming on the heels of a disclosure that the queues in petrol stations are due to the reluctance by the Independent Petroleum Marketers of Nigeria (IPMAN) and stakeholders in the chain of distribution of petroleum products in the country to continue the importation of PMS and other products, as a result of the non-payment of subsidy money due to them by the Ministry of Finance.
A source at the Presidency who spoke on the development yesterday said: "The current fuel supply and distribution situation being experienced by Nigerians is traceable to recent vandalism of our products pipeline at Arepo where Pipeline Products and Marketing Company (PPMC) engineers who went for repairs were shot and three of them killed. As a result of security challenges, PPMC is yet to gain access to the vandalised points to effect repairs." Arepo, which is located in Ogun State, is along the Atlas Cove-Mosimi line that feeds five depots and accounts for products supply to the whole of the South-West region and also contributes to about 60 per cent of total bridging to the North.
The source dispelled the notion that Nigeria can rely on trucks to supply products to every part of the country.
The source further explained that with adequate security of the pipelines, a robust pipeline network of about 5,120km across the nation, 21 loading depots and 19 pumping stations, the nation could guarantee stable supply and distribution of petroleum products.
The source also disclosed that over $9 billion assets had been unused due to the incessant pipeline vandalism.
Once the pipelines are available, the sources said, "PPMC is ready to pump all products to the depots located in all regions of the country. It is only when the pipelines are not available that they are compelled to use other methods to make the products available. In the absence of security, the vandals have a field day and prevent the pipelines from functioning effectively."
The Presidency source added that despite the challenges, "PPMC has re-commissioned Kaduna-Suleja line, Kaduna-Kano line, Suleja-Minna line, Kaduna-Gusau line, Kaduna-Jos line and Port Harcourt-Aba line and Warri-Benin line. With these lines functioning, NNPC has been able to distribute products to Suleja, Kano, Minna, Jos, Gusau and Aba depots. Some of these depots have not worked for over 15 years. It is noteworthy that in spite of the numerous challenges facing the NNPC in maintaining pipelines, products like AGO and DPK that have not been pumped to these depots are now being pumped."
Statistics show that about 1,061 trucks are needed to move products estimated at about 35 million litres of PMS daily which seems to be a hard way to go considering the bad state of the roads.
"With our bad roads, robbers and environmental considerations in having the trucks travel length and breadth of this large country, what effect can that achieve?" the source queried.
Meanwhile, the Presidency has appealed to Nigerians to help government secure the pipelines saying that the assets belong to them.
"Nigerians must not forget that energy worldwide is regarded as a national asset. A threat to energy supply is often viewed as a threat to national security. The nation cannot allow persons or group of persons threaten what is collectively ours. It should be considered as security risk and economic sabotage," the source said.
An industry source who also prefers anonymity lamented that with the increase in cases of pipeline vandalism in the last two decades ago, "how many culprits have been apprehended and successfully prosecuted, except for the small- time jerry can boys while the main players who use valves to siphon products with barges and with trucks are left to enjoy their loot? These are pertinent questions we should ask ourselves as a nation rather than blame the Nigeria National Petroleum Corporation (NNPC) or an individual. The problems are rather systemic!"
The source urged the current PPMC management that took over in February, 2011 to continue to improve on their distribution chain, saying that "no major fuel supply and distribution issues have been encountered in the last 20 months except pocket of queues caused by the non-payment of subsidy money to marketers."
The source added: "Since the heated issue of subsidy began in early 2012, NNPC/PPMC has solely sustained Premium Motor Spirit (PMS) supply to the Nigerian market as marketers have refused to bring in products. Despite that singular effort by PPMC, supplies have been robust and hitch-free with PMS available across the nation at a uniform price."
