This Day (Lagos)

5 March 2014

Nigeria: Petroleum Ministry Unable to Account for N500 Million PIB Publicity Funds

Revelations emerged Tuesday on how the Ministry of Petroleum Resources misappropriated N500 million allocated for the promotion of Petroleum Industry Bill (PIB) in the 2013 budget without accounting for it. The disclosure was made when the ministry appeared before the Senate Committee on Gas for the defence of its 2014 budget in the National Assembly.

This came as the Department of Petroleum Resources (DPR), which attributed the current scarcity of petrol to the non-renewal of contracts of some independent marketers for the importation of petrol, also told the Senate Committee on Petroleum (Upstream) during its budget defence that the non-payment of subsidy to marketers by the federal government was hindering the importation of fuel and thus had resulted in the shortage.

While appearing before the gas committee on behalf of the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, Permanent Secretary of the ministry, Danladi Kifasi, said he could not explain the details of the expenditure because he was new in the ministry, having been posted to the ministry in August last year.

According to him, the only records at his disposal showed that the N500 million was spent on radio and television jingles, newspaper advertisements and monitoring vehicles, among others. He however, failed to give the breakdown of the expenditure. A member of the committee, Senator Bello Tukur (Adamawa Central), who raised the issue, queried the rationale behind the involvement of the ministry in PIB campaign, noting that the Nigerian National Petroleum Corporation (NNPC) had been the agency driving the bill.

But in what seemed to be an afterthought, the ministry's Director, Public Relations and Press, Mr. Kingsley Agha, claimed after the session that the ministry was not given the opportunity to give details of the expenditure.

He also claimed that there was documentary evidence on how the money was used to erect billboards in strategic locations in major cities of the country, adding that part of the funds was also used for radio and television campaigns.

In the same vein, the permanent secretary could not defend the budgetary allocations to the ministry for the development of gas infrastructure in 2013, moreso since the ministry lacks the necessary technical manpower and capacity to execute such projects. In 2013, the sum of $3.16 billion was allocated to the ministry for capital projects on gas infrastructure out of which $1.7 billion was released to the ministry.

While questioning Kifasi on the progress made by the ministry in the area of gas infrastructure development, the committee chairman, Senator Nkechi Nwogu, said: "Somebody should tell this committee what you did in the area of gas infrastructure and development in 2013."

Responding, Kifasi said: "On the part of the ministry, absolutely nothing was done on gas infrastructure development because we do not have the technical capacity to go into the construction of gas pipelines." He however admitted that the ministry received allocations for the development of gas infrastructure in the 2012 budget. Reacting to the statement by the permanent secretary, Senator Ifeanyi Okowa wondered with dismay why the ministry allowed such resources to be allocated to it every year when it knows that it lacks the capacity to execute such projects.

On the shortage of petrol nationwide, DPR Director, who was represented by the Zonal Operations Controller, Abuja, Aliyu Halidu, argued that oil marketers were not comfortable with the current pump price of N97 per litre, adding that the marketers had complained that the operational cost and other incidentals had adversely affected the pump price, thus making the current price unprofitable. Halidu also argued that the shortage in fuel supply was equally triggered by illegal bunkering in the country and urged the lawmakers to expedite action on legalising bunkering in addition to resuscitating other laws which could facilitate the elimination of illegal bunkering from the system.

He said DPR had already forwarded a proposal to the Office of the National Security Adviser (NSA) on a new legalisation on bunkering with a view to curtailing illegal operations, adding that the NSA had assured Nigerians that the relevant laws would be resuscitated to help tackle all the problems arising from illegal bunkering.

The zonal controller also implored the Senate to fast-track the passage of the PIB, saying it would strengthen DPR's regulatory powers for effective operations in the industry.

On the decline in revenue generation by the department, Halidu blamed this partly on the failure of NNPC to pay royalties due the DPR, explaining that rather than pay royalties to DPR, the corporation had been paying it as part of its crude oil sales, lamenting that this had contributed to the decline in revenue from his establishment.

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