LAGOS—The federal Government committee on
fuel subsidy verification has discovered that eight oil marketers in
identified 13 transactions made total subsidy claims of N12.154 billion
for which the banks denied financing.
The transactions were declared by the verification committee to be
false as they were disowned by banks through the Form M for which the
oil marketers claimed they used in opening letters of credit with the
banks for the importation of products.
This implies that the products were never imported but subsidy was paid.
The Report of the Technical Committee on Payment of Fuel Subsidies, a copy of which was sighted by Vanguard
said: “A total of 13 transactions belonging to eight customers as
contained in (Petroleum Products Pricing Regulatory Agency), PPPRA
subsidy payment due schedule were disclaimed by banks. The transactions
were not found in their records as at the date of the verification.
Some of the tankers used for fuel supply by marketers
“The total subsidy claims for this category of transactions stood at N12, 154,918,932.18.
“The disclaimer of these
transactions by the banks shows that they did not exist in the first place and consequently, there was no basis for the payment of subsidy claims,” the Report said.
transactions by the banks shows that they did not exist in the first place and consequently, there was no basis for the payment of subsidy claims,” the Report said.
The Committee thus recommended that: “Unless the oil marketing and
trading companies provide evidence of how these transactions were
executed; how the products were paid for and how sales proceeds were
received into a bank account before payment of subsidy, they should
refund the subsidy payments received, and where the subsidy has not been
paid, it should be withheld.”
No letter of credit for N13.40bn claims
Furthermore, out of the transactions above, there was no evidence
that the underlying Letters of Credit in respect of 12 of them had been
negotiated. The customers in this category were credited with Sovereign
Debt Notes (SDN) with related subsidy claims for the total sum of
N13,404,395,769.01. The Report therefore, said: “This implies that there
is no evidence that the products were paid for or that they were sold
within Nigeria.”
It further recommended that “unless the oil marketing and trading
companies provide proof of receipt of sales proceeds into a bank account
before payment of subsidy, they should refund the subsidy payments
received and where the subsidy has not been paid, it should be withheld.
In addition, for the transactions without evidence of negotiation of
the letters of credit (or of foreign currency payment for the products),
PPPRA should drop them from the scheme if they are unable to provide
proof of receipt of sales proceeds and payment of foreign exchange.”
More spurious claims
The report also discovered various other ways through which oil
marketers and importers devised to make huge spurious subsidy claims
with no documentary evidence to defend them.
For example, it discovered 18 other transactions with subsidy
payments in excess of N20.46billion, which “either had no shipping
documents or evidence of payment for the products in foreign exchange.”
This also implies that the products were not paid for and they may not have been imported into the country.
According to the committee, “Unless the oil marketing and trading
companies provide evidence of how the products were paid for, they
should refund the subsidy payments received and where the subsidy has
not been paid, it should be withheld”.
It further discovered that: “Form “M” number MF803765 established for
Bills for Collection by Messrs Sifax Oil and Gas Limited on the 20th
March 2010, and approved by a bank since 30th March 2010, had remained
unpaid till date. A review of the transaction file showed a Bill of
Lading dated 30th December 2010, and a Collection Order stating 30th
March 2011, as the value date of the transaction, although there was no
Bill of Exchange to the effect.
In addition, there was no SGD form to evidence that the consignment
had arrived in Nigeria. On inquiry, the bank claimed that they were
waiting for the customer to make payment but there was no evidence that
the bank made any contact with the customer.
The committee
It would be recalled that the idea of the Technical Committee on
Subsidy was hatched on February 28, 2012, and was meant to “review
outstanding claims for fuel subsidies,” as fallout of the stakeholders’
meeting of the downstream petroleum sector.
The meeting was chaired by the Coordinating Minister of the
Economy/Minister of Finance, Dr. Ngozi Okojo-Iweala, who constituted the
10-man committee on April 17, 2012, headed by the Group Managing
Director/Chief Executive Officer, Access Bank Plc, Mr. Aigboje
Aig-Imoukhuede.
The terms of reference included to authenticate the backlog of
outstandingpayments of subsidy payments to marketers in 2011; verify the
legitimacy of backlog of claims already submitted by marketers for
2011; and review any other pertinent issues that may rise from the
exercise.
Other members included the Director General, Budget Office of the
Federation, Dr. Bright Okogu; Director General, Debt Management Office,
Dr. Abraham Nwankwo; Accountant General of the Federation, Mr. Jonah
Otunla; Executive Secretary, Petroleum Products Pricing Regulatory
Agency, PPRA, Mr. Reginald Stanley.
Others were the Group Executive Director, Finance and Accounts, NNPC;
and representatives of the CBN, Bankers Committee as well as Mr.
Obafemi Olawore for the major and Mr. Mike Osatuyi for the independent
marketers respectively.
Marketers build proof
Meanwhile, the exposure of the report has sent marketers and oil importers scampering to gather proof in their defence.
One of the affected companies, Integrated Oil and Gas, at a press
briefing in Lagos on Monday, refuted collecting N1.734,920,131.20 as PSF
refund without an auditors signature.
The Managing Director, Integrated Oil and Gas, Capt. Emmanuel
Iheanacho, told newsmen that his company did not receive the said
amount.
He said “In line 22 of the schedule of 88 companies, Integrated Oil
and Gas Ltd was alleged by the technical committee to have been paid the
sum of N1.734,920,131.20 as PSF refund without an auditors signature.
“This allegation is not correct for the simple reason that we do not
recongnise this as a transaction which integrated Oil and Gas had
undertaken at all. We do not know the transaction under reference; we do
not recognise the amount quoted as a payment which we may have received
under any circumstance.”
