Nigeria: Mismanaged Fuel Subsidy Programme Post $6.8 Billion Loss
Nigeria lost $6.8 billion from 2009 to 2011 due to corrupt and mismanaged practices of its fuel subsidy programme, said a report presented to the Nigerian parliament on Tuesday, with numerous officials from the nation's state-controlled oil company and other government agencies said to be implicated in the scandal.
"Government officials made nonsense of ... guidelines due mainly to sleaze and, in some other cases, incompetence..."
"It is therefore apparent that the insistence by top government officials that the subsidy figures was for products consumed was a clear attempt to mislead the Nigerian people," wrote the report, as cited by the Associated Press.
Related: Nigeria Economy
Related: Nigeria Economic Statistics and Indicators
The investigation by lawmakers initially began as a response to strikes and protests across the country in January after President Goodluck Jonathan had ordered the removal of popular petrol subsidies following a study of its toll on the nation's economy.
The subsidies, in theory, were supposed to keep prices artificially low for consumers by paying companies to bring in refined gasoline at a loss against the world market price; but this soon devolved as a means of winning personal favours from companies, as licenses to import oil were issued without any real oversight of the companies' practices.
AP reported that, in one case, two businessmen who had initially made a pitch to handle waste management at the state-run Nigerian National Petroleum Corp. instead applied to become importers and got a $12.4 million contract in 2011 for fuel it never supplied.
Furthermore, the number of companies licensed to "import oil" somehow managed to jump from just six in 2006 to 140 in 2011, with government officials once issuing about $800 million for 128 contracts in a 24-hour period without any form of proper documentation.
President Goodluck Jonathan has since renounced a partial return to subsidized rates for petrol, with a litre of petrol costing 60 cents now, compared to 94 cents after the subsidies were taken away and 45 cents during its full implemenation.
"The operations of the (oil companies) were opaque and not transparent," the report reads. "The implication on this is that it created room for abuses, inefficiencies and manifest lack of accountability."
Nigeria's House of Representatives has also pledged to pass on the report's findings to the "the President, the Senate President and all the anti-corruption Agencies of government for further action."
However some Nigerians were also concerned that the elite status of those implicated in the case, may result in little being done to protect consumers.
We are fighting against entrenched interests whose infectious greed has (hurt) our people," House Speaker Aminu Waziri Tambuwal said. "Therefore, be mindful they will fight back and they normally do fight dirty."