EFCC obtains N13 billion from unauthorized fuel subsidy payments.

The PUNCH has learned that between 2017 and 2021, the Economic and Financial Crimes Commission recovered roughly N13 billion as the profits of illegitimate payments made under the subsidy regime.

This was based on a document that our correspondent downloaded from the Nigeria Financial Intelligence Unit's website entitled "National Inherent Risk Assessment of Money Laundering and Terrorist Financing in the Nigerian Extractive Sector."

The Economic and Financial Crimes Commission, which is in charge of looking into and prosecuting cases involving fraudulent oil and gas subsidies in Nigeria, said in the report that it had "recovered N12, 998,963,178.29 as proceeds of illegal payment made under the subsidy regime between 2017 and 2021."

According to a tabular breakdown, almost N4.67 billion was recovered in 2017, N4.29 billion in 2018, N2.41 billion in 2019, N416.51 million in 2020, and N1.22 billion in 2021.

The report also mentioned that there were several potential for illegal activity in the oil and gas industry.

"Opportunities for fraudulent actions exist in the oil and gas sector, from extraction to sales of refined goods to consumers," the report's conclusion read. It is impossible to quantify the amount of crude oil extracted or even stolen through oil theft and vandalism because there is no dependable equipment to measure the volume of crude oil being removed. Oil theft also happens in the downstream industry because gas pumps at gas stations are manipulated or faked.

“Also, to be noted is the sale of petroleum products on the ‘black market’ giving rise to petroleum products being sold at exorbitant prices. Of concern is the emerging trend of filling station attendants acting as money agents, without appropriate customer due diligence carried out. It should be stated, however, that in most cases, the amount sold to an individual is usually not suspicious. However, if left unchecked, this practice could pose a threat to the country.”

It also noted that there had been diversion of petroleum products to non-designated retail outlets, which is a fraudulent practice that leverages on the fuel subsidy regime.

"Other fraudulent actions include diverting petroleum goods to non-designated retail outlets to obtain unfair financial advantage," the study continued. This practice may occur within one state, between states, or even outside of Nigeria's boundaries in nearby nations.

"A huge number of trucks and other vehicles used to transport refined goods from the nation were seized as a result of the Joint Border Exercise in August 2019 with operation codenamed "Exercise Swift Response." The Office of the National Security Adviser oversaw the planning of this exercise. As the price of PMS in Nigeria is substantially cheaper than in its neighbors, this is also related to the subsidy system.

Petroleum product smuggling is yet another deceptive operation. In contrast to daily consumption projections made by the government, the NNPC saw daily rises in Premium Motor Spirit evacuation in a number of depots around the nation. These spikes prompted the NNPC, stakeholders, and LEAs to reactivate Operation White II, an interagency task team, in May 2021. Additionally, it was said that huge quantities were being smuggled out to nearby nations like the Benin Republic, Cameroun, the Niger Republic, etc. at higher PMS rates than Nigeria. To safeguard the nation's energy security, the OPW II team was tasked with stopping the smuggling, diversion, and hoarding of PMS. There are ongoing intelligence-driven inquiries.

The Nigerian National Petroleum Corporation said that gasoline subsidies consumed N1.43 trillion in 2021, despite the fact that there was no evidence of under-recovery in January.

The National Assembly adopted a gasoline subsidy bill for 2022 of N4 trillion, an increase of 179.72% over the subsidy bill for the previous year.
Experts have however cautioned the Federal Government that the N4tn fuel subsidy bill will have a negative impact on the economy of the nation.