News / Africa

Nigerian Senate Orders Audit of Unaccounted $20 Billion in Oil Revenue

TEXT SIZE - +
Reuters
— Nigerian lawmakers investigating a claim that the state oil company has failed to remit $20 billion in oil revenues ordered a forensic audit of fuel-subsidy payments on Thursday to find out where the money has gone.

Central Bank Governor Lamido Sanusi wrote a letter last September to President Goodluck Jonathan saying almost $50 billion in revenues from oil exports from January 2012 to July 2013 had not been remitted to the federation account, in a clear violation of the law.

He later lowered the estimate to $20 billion in his testimony to a Senate committee investigating the case. On Thursday, that committee questioned the finance minister, oil minister and Nigerian National Petroleum Corporation (NNPC), which denies Sanusi's charge that it runs fraudulent rackets.

The governor's suspicion of massive fraud at the heart of one of the world's most opaque state oil companies has put pressure on Jonathan a year ahead of elections, when he is already reeling from a failure to quell a northern Islamist insurgency.

It has also scared off debt investors worried about government squandering of oil revenues during election cycles. Sanusi said graft is slashing forex reserves needed to support the naira. The currency fell to an all-time intraday low of 167 to the dollar on Thursday, driven by foreign portfolio outflows, until the bank intervened.

The biggest gap in accounting is for $8.5 billion the NNPC says it retained from revenues during the 19-month period to cover subsidies it was owed on importing gasoline and kerosene.

NNPC says it buys kerosene at 150 naira a liter and sells it to suppliers at 50 naira per liter. But the retail rate is still 150 naira, which Sanusi said showed the subsidy was just “rent generated for the benefit of those in the kerosene business”.

He also says a directive in 2009 by then President Umaru Yar'Adua, who died in May 2010, scrapped kerosene subsidies. Petroleum Minister and NNPC Chair Diezani Alison-Madueke told the committee they continued to subsidize kerosene despite the presidential order to prevent hardship for Nigerians.

Call for transparency

“This illegality must end,” Senator Ibrahim Gumba said at the hearing. NNPC had no legal right to ignore a presidential order or to collect a subsidy that was not allocated, he said.

The head of the committee, Senator Ahmed Makarfi, told the finance ministry to set up an independent audit of subsidy claims approved for NNPC by the petroleum regulator PPPRA, which came under scrutiny in 2012 over a separate multi-billion-dollar fuel subsidy fraud involving private companies.

Finance Minister Ngozi Okonjo-Iweala agreed to organize a forensic audit.

Among items requiring an explanation are the fact subsidies were being paid out on 54 million liters of fuel per day, even though Nigeria only consumes 40 million liters per day - a discrepancy that lay behind a previous subsidy scam.

Sanusi also said that some of the $6 billion that NNPC's producing arm, NPDC, earned during the period should have been submitted to government accounts. Instead, it has been funneled into private hands through special deals given to oil companies.

NNPC has been criticized in several investigations in recent years, but consistently denies any wrongdoing.

“It is a lack of communication and misunderstanding which are causing these embarrassments,” said Alison-Madueke.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid