FG to prosecute oil marketers over $1.5bn stolen funds

Federal Government is now set to prosecute and reclaim over N232 billion ($1.5 billion) overpayments made to fraudulent oil marketers.

Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, made the disclosure at the just-concluded National Council of Finance and Economic Development (NACOFED) in Minna, Niger State. Read ore

She said in 2006, the total petroleum subsidies paid to oil marketing firms amounted to N256 billion (about $1.6 billion) and by 2011 the bill for petroleum subsidy payments had risen sharply to nearly N2100 billion ($13 billion).

“Even more striking was the increase in the number of oil marketing firms. While most countries have a few well-organised fuel importers, Nigeria had a total of 143 such firms as at 2011. The certification process to verify the actual delivery of imported fuel was also very lax, resulting in widespread fraud in the operation of the scheme,” she said.

According to her, there were cases where some firms submitted payment invoices for fuel deliveries in Nigeria, when their stated cargo ships were actually berthed elsewhere in South America on the same dates, adding that the subsidised prices for domestic gasoline in Nigeria also created arbitrage opportunities and resulted in widespread smuggling of fuel products to Nigeria’s neighbouring countries.

To this effect, Okonjo-Iweala said Nigeria embarked on a comprehensive reform of the downstream petroleum sector by appointing the Aigboje Aig-Imoukhuede committee, which discovered lapses in the payment processes.

Following the discoveries, she said, the Federal Government put in place a number of remedial measures to combat fraud in the subsidy scheme.

“First, a tighter payment regime was introduced with new auditors and stricter guidelines for disbursement of subsidy payments. The increased scrutiny has slowed down the payment process somewhat but also greatly reduced the likelihood of fraudulent payments. Second, we published the names of fraudulent oil marketing companies in the national press and are in the process of prosecuting these fraudulent marketers to reclaim the stolen funds,” she said.

To prevent more fraudulent payment claims, she said, the government was introducing three electronic payment systems and oversight platforms.

“The new Integrated Personnel and Payroll Information Systems (IPPIS) allow direct payment of government workers based on biometric data. This has so far saved government over N119 billion through the elimination of ghost workers. A government Integrated Financial Management Information System (GIFMIS) electronically links the treasury to other government departments and enables faster and more transparent movement of funds,”she explained.

From ISAAC ANUMIHE, Abuja

Culled from The Sun newspaper