The Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed that the federal government paid out a total of N303.4 billion to petrol marketers in five years – between 2012 and 2016, as financial claims for trucking of petrol to various parts of the country under the bridging claims scheme of the Petroleum Equalisation Fund (PEF).
NEITI in its latest Fiscal Allocation and Statutory Disbursement (FASD) audit report explained that PEF got N382 billion as bridging allowance within the period under review and paid out N303.4 billion to oil marketers as claims for products bridging.
“A total of N499 billion was received by PEF within the review period. Besides, PEF also realised N382 billion bridging allowance. NEITI report revealed that most of its expense totaling about N303.4 billion was expended on claims.
“The report noted that the Fund does not impose penalties promptly on defaulting independent and major oil marketers that did not pay their required contribution. It also noted that utilisation of the Fund is not separated between the core activity and administrative purposes,” said the NEITI report which was recently released.
According to the PEF, the bridging scheme was originally introduced as a temporary measure during the turn-around maintenance (TAM) of refineries operated by the Nigerian National Petroleum Corporation (NNPC), wherein government sought to encourage and support marketers in transporting petroleum products nationwide.
The PEF explained that although bridging was meant to be a temporary solution until the refineries were producing back at full capacity, the state of the refineries has worsened over the years.
In addition, it noted that pipeline vandalism by militants and economic saboteurs have been on the increase, to the point where trucks have become the major source of distributing petroleum products in recent times in Nigeria.
According to the PEF, the initial projection was to have a maximum of 10 per cent of total petroleum products bridged while the remaining portion would be pumped through the pipelines.
However, trend analysis indicated that bridging of products has consistently increased over the years to about 40 per cent.
It explained that there were also noticeable trends whereby products were bridged from Lagos to the South-east and South-south areas of the country, to address products unavailability from the refineries in Port Harcourt and Warri.
Furthermore, in its FASD report, the NEITI explained that the natural minerals sector of Nigeria contributed N805 billion of N993 billion paid to the Tertiary Education Trust Fund (TETfund) within the period to support its education intervention job.
NEITI however stated that the TETFund lacked sufficient accounting processes to track its use of funds for its operations.
According to it: “The fund received a total of N993 billion with N805 billion from mineral revenue while N188 billion was received from non-mineral.”
However, the NEITI report noted that the fund does not have a comprehensive accounting and operational manual; hence, there was insufficient guide for accounting and operations’ processes.
This it stated, made it difficult to verify the income received from the various sources by the fund and to evaluate the utilisation of the money received.
Turning to the Petroleum Technology Development Fund (PDTF), the NEITI noted that PTDF also lacked a means of tracking the impacts of its overseas scholarships beneficiaries on Nigeria’s oil and gas industry, adding that it N119 billion was given to it from the signature bonuses paid by oil companies on their acquired assets.
“The fund received a total of N124 billion with signature bonus accounting for N119 billion or 96 per cent.
“From the report, 37 per cent of the expenditure was on assisted project, 20 per cent was on scholarships while the balance of 43 per cent was spent on administrative purposes.”