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Nigerian Lawmakers to Investigate $17b Subsidies Received by NNPC

Source: Reuters 3/1/2017, Location: Africa

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Nigeria's upper house of parliament will investigate allegations the state oil company illegally inflated funds it collected from an official subsidy scheme to 5.1 trillion naira ($17 billion) between 2006 and 2015, lawmakers said. The Senate's decision to launch an investigation followed an emergency motion raised by Senator Dino Melaye, who told the Senate there were possible irregularities in subsidies collected by NNPC from the government between 2006 and 2015 on its 51 percent market share of fuel imports. He did not name the source of the allegations.

NNPC was previously implicated in allegations of fraud in an investigation in 2012 that discovered a $6.8 billion fuel subsidy scam, one of the biggest corruption scandals in Nigeria's history. It was not immediately clear whether the new Senate investigation would include the 2012 allegations or look into entirely new ones. A spokesman for NNPC said the company would study any allegations if it is formally notified.

"NNPC has not been formally communicated on the issues. If received, the NNPC will study the alleged issues and respond accordingly," the spokesman said. Melaye's motion did not specify how much of the 5.1 trillion naira received by NNPC allegedly came from fraudulent activities. It did not explain how the amount of 5.1 trillion naira was calculated. The motion also alleged that the NNPC sent excess refined products to storage owned by private individuals, which was then sold off illegally by those owners.

In the 2012 investigation, companies including NNPC were found to have declared the same fuel import cargoes multiple times and claimed subsidies for fuel never delivered or sold to neighbouring states. Subsidies are a murky issue in Nigeria. The government hasn't allocated any money to them since 2016, but effective support remains in place, including giving petrol importers access to dollars at very favourable rates. ($1 = 305.0000 naira)

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Related Categories: Events  Executive Recruiting  General  Legal  Petroleum Associations  Professional Associations  Sourcing & Procurement 

Related Articles: Events  Executive Recruiting  General  Legal  Petroleum Associations  Sourcing & Procurement 


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