Fuel Imports: Customs, NEITI Say NNPC Stinks, Corrupt

… Customs Say NNPC Takes Mother Ships Carrying Imported Petroleum Products To Cotonou, Lome To Evade Paper Work

 
ABUJA, January 17, (THEWILL) - The Nigeria Customs Services (NCS) and Nigeria Extractive Industries Transparency Initiative (NEITI) Tuesday said the management of the country’s crude oil and importation of petroleum products by Nigerian National Petroleum Corporation (NNPC) lacks transparency and is fraught with corruption.
 
Comptroller General of Nigeria Customs Services, Abdullahi Dikko Inde and Chairman of NEITI, Prof. Assisi Asobie disclosed this before the House of Representatives ad hoc committee on the management of subsidy.
 
The comptroller general who was represented by Julius Ndubuisi Nwankwo, a deputy comptroller general in his submission said the NNPC does not berth mother vessels on Nigerian ports contrary to the provisions of the extant laws.
 
He advised the Committee to seriously look into “the average diversion and compare with the capacity of the mother vessels with the smaller ones which capacity are known,” stressing that smuggling generally should not be allowed to assume a dimension that it will dislodge the economy.”
 
The customs representative further disclosed that NNPC has failed to pay duty on imported PMS worth N45 billion to Customs from 1999 to 2002 when the duty was formally suspended by Federal Government.
 
He alleged that NNPC has over the years diverted to berth the “mother ships” carrying imported petroleum products to neighbouring countries (Cotonou-Benin and Lome-Togo) and only presented manifest of the smaller ships carrying the imported PMS to Customs.
 
According to him, no invoices are attached during clearance adding that “as we speak, most of the importation of PMS has no documentation. NNPC does not make any documentation available to the Customs. Several meetings were held where the NCS was directed not to ask for documents.
 
“The ministry of finance wrote to NCS warning them not to ask for documents because this will cause crisis,” he stated.
 
He said as a result of the lack of documentation, the NCS is not in a position to give the exact number of vessels that are imported by the NNPC. Explaining further, he urged NEITI to conduct forensic audit of all the ships in Nigeria and from their exporting countries in order to ensure transparency.
 
Nwankwo, who also berated the corruption in the oil and gas sector, disclosed that there were no documentation of PMS imported by NNPC into the country and that only independent oil marketers made attempts to document importation.
 
He explained that the Federal Ministry of Finance had in a letter sent to Customs warned that any insistence to enforce Customs rules (SEMA) would cause untold hardship and petrol scarcity in the country.
 
In his presentation, Chairman of NEITI, Prof. Assisi Asobie disclosed that payments made in respect of fuel subsidy by the NNPC “lacked transparency and due process”.
 
The NEITI chairman said that subsidy payments should be made from the Central Bank through the Petroleum Fund but that has not been the case with NNPC.
 
He said, “This clear due process is not followed by the NNPC. NNPC estimates the subsidy entitlements and deducts the estimated amounts directly from the domestic crude proceeds before remitting the rest to the federation account.”
 
He noted that during the audit of the oil and gas sector for 2006 and 2008, NEITI discovered inadequacies that complicated the problem of accurate determination of volume of imported petroleum products into the country.
 
Asobie revealed that from 2002, NNPC lifted domestic crude at market price, providing incentive for export of domestic crude rather that domestic refining of all crude adding that from 2006 to 2008, the total oil lifted from the country was 8.8 million barrels, while NNPC lifted 4.8 million barrels.
 
According to him, the measurement methods used by the PPMC and DPR are not in accordance with best practice; even then they are not consistently applied and cannot be relied upon.”
 
The NEITI chairman equally noted that the systems for recording the movement of refined products through the PPMC pipeline system are outdated; paper based and subject to error.