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Corruption In Petroleum Equalisation Fund: What Buhari Does Not Know? By Ifeanyi Izeze

December 14, 2015

With every day that passes in this country; it becomes more difficult to know whose words to believe. The executive would say one thing; the lawmakers would say another; and the politically-affiliated Nigerian businessmen would come out with theirs. What this does, is make the ordinary Nigerian more confused about the real state of the nation as everybody has his own side of the story which most times are complete opposites of each others’.

Is it not surprising that the Nigerian National Petroleum Corporation (NNPC) could claim that from January to October 2015, its three refineries (Port Harcourt, Warri and Kaduna) produced 682,901 Metric Tonnes of finished Petroleum Products out of the 7,005,997.28 barrels of crude oil processed at an average capacity utilization of 5.18 per cent and yield efficiency of 78.93 per cent?

NNPC also said that in October 2015, it supplied 852.10 million litres of white products into the country through the Off-shore Processing Agreement (OPA) arrangements, compared with a volume of 763.90 million litres achieved in September. As said, Kerosene (DPK) receipt in October was 206.46 million litres, compared with
196.30 million litres imported in September.

So how do you reconcile that despite the NNPC’s claim of tangible supply of petrol and kerosene (dual purpose), scarcity of the same products has continued unabated? Walahi, the major problem of this country is that what divides self-deceit and outright mischief is so thing that most times it is as good as non-existent in the first instance.

How could NNPC claim that its three refineries jointly processed 7,005,997.28 barrels of crude oil? Which refineries were they talking about? Was it the Kaduna that has been completely down for as long as anybody can remember despite the daily deceitful flaming or the Warri plant that has been having process issues in addition to the problem of availability of crude oil feedstock?

So what is the NNPC talking about?

The corporation would have honestly told us that the dangled output representing combined performance from January to October this year came solely from the Port Harcourt Plant which also was sick for most of the period under review. Is it not clear from the NNPC’s dangled 5.18 percent capacity utilisation and yield efficiency of 78 percent figures that the corporation merely shared whatever the Port Harcourt plant did with the two other epileptic or rather completely dead plants?

Agreeing that there is a real problem was supposed to be part of the finding solutions to such issues. If the Kaduna plant had ever worked since January, the question would be, where did it get the crude oil feedstock from and how, because the same NNPC told us few weeks ago that the Kaduna plant could not be re-streamed after the maintenance job because it was discovered that the crude oil pipeline supplying it from the Trans Forcados system had 78 ruptures between Warri and Lokoja. Has the pipeline been fixed? Yeye country! How can we genuinely solve our problems if those in charge, in deceit continue to lade the problems with lies?
My dear President, this is the actual problem that has created and would continue to create scarcity of petroleum products across the country: A few individuals within the system- NNPC, PPMC, National Assembly and even in the executive arm of government are bent on ensuring what we have as refineries are practically rendered useless in order to pave way for bridging of products where billions or even trillions of Naira has been ripped -off this country.

It is very pathetic that the gulf between good concepts and their implementation in this country is so wide that it can swallow the whole country. What is “Bridging”? This concept was patriotically introduced by the federal government to cushion the effect of petroleum products pipeline vandalism and epileptic refinery operations in parts of the country especially the hinterlands. Under the arrangement, the Federal Government encourages and supports marketers in the transportation of products nationwide using fuel tankers by paying the agreed cost of moving the products.

This arrangement which was supposed to be a palliative or rather interventionist pending when damaged pipelines and maybe the coastal refineries depots  would start pumping products, has ended up becoming a bigger problem than even the pipeline vandalism as it has provided a good platform for mind-blowing corruption and broad day stealing of our collective wealth. As remarked, it has also “created a leeway for a cabal to hold the country by the jugular by ensuring that our pipeline system never works in addition to ensuring that Turn Around Maintenances in our coastal refineries become everlasting exercise.”

Everybody involved in the distribution of petroleum products in this country- Major marketers, Independents, and Transportation companies (Tanker owners) are taking advantage of the loopholes in the scheme to fleece the country of hundreds of billions on false claims as bridging expenses.

It would be recalled that the Nation Newspaper recently ran an interview with an official of the Petroleum Equalisation Fund (PEF) and it was disclosed that what these dubious marketers do, was to lay claim to “non-existing filling stations as outlets scattered all over the country and after loading products in Lagos, they returned with reports that they had offloaded at these stations, whereas they had diverted the products immediately after leaving the depots.”

As reported by the Nation, “the bridging claims and rates depend on the destination from the depots. For instance, a marketer loading products from Lagos to Aba gets N8.02k on every litre; Lagos to Kaduna (N12.72k) and Lagos to Enugu (N7.90k).  So, if a marketer loads about 20 trucks of 33,000 litres each with assumption of bridging it to Kaduna, he will collect N839, 520:00. And if the marketer belongs to the cabal, all the trucks would be diverted to black markets. PEF detected that 90 percent of the fuel loaded at Lagos depot allegedly disappeared in Lagos. Only 10 per cent got to the final destination.”

What Nigerians don’t know is that the entire stretch of northern Nigeria is fed by “bridged” petroleum products from the coastal depots particularly the Atlas Cove and some private facilities majorly in the Lagos area. Also some levels of bridging take place from facilities in Warri and Port Harcourt.

If government pays N12.72k on every litre that leaves Lagos to Kaduna, that means the rate for products going to Yola, Sokoto, Maiduguri and other far northern sections of the country would be far well above N12.72K.

The government in the first instance agreed to the concept of “equalisation” because it wants fuel to sell at uniform prices anywhere in the country. So it was meant for the good of the ordinary Nigerians. But these thieves- oil marketers and tanker owners collect the differentials; sell the same products in black markets in Lagos abandoning the people the programme was meant to serve to their cruel faith. You see wickedness! No wonder in some parts of Nigeria, petrol sells for between N200 and N300 per litre. The riverine areas in the south are not spared in this wickedness also.

The corruption in the entire concept of “Equalisation” if we look properly (and we must do) may be in the neighbourhood or even more than what we had going on with the gamut of Offshore Process Agreements (OPAs) and subsidy payments. And surprising, nobody has ever raised any alarm of this continued drain. All we have been fed with has been the sleaze in the subsidy racket. Is it not curious?

All hands must come on deck- Presidency; civil society; and National Assembly (if they would agree) for us to even first ascertain the extent of lose and drain by these Tanker Transport Companies and their collaborating oil marketing companies including some majors and most independent marketers.

How much has the Petroleum Equalisation Fund (PEF) received from inception to date and how much did the agency pay out and to which specific companies- transporters and marketers?

It would surprise Nigerians to know the magnitude of fund the nation has expended on this equalisation racket and which ultimately ended up in the pockets of few powerful individuals both in and around government past and present.

If President Buhari sets out to block all leakages in the system (oil sector), this Petroleum Equalisation Fund must be probed after which it should be completely scrapped afterall Nigerians in the targeted sections of the country have been paying far above the government –regulated price regime. God bless Nigeria!

IFEANYI IZEZE lives in Abuja: [email protected]