Nigeria - Still On Fuel Subsidy, Fake Subsidy By Simon Kolawole

Was I excited to see certain persons being charged to court last week over the alleged fuel subsidy scam? Not sure. But I was not unhappy either. It is just that things have gone so bad in this country that scepticism has become part of our culture. Even when we see something that looks good and positive, at least on the surface, a part of us says: “Don’t mind them. It won’t lead us anywhere.” That happens to be the reaction of many Nigerians when the suspects were charged to court. Having the sons of the chieftains of the Peoples Democratic Party (PDP) facing trial is by no means an insignificant development in a country where anarchy is the law. Indirectly, their fathers are also facing trial. So, for whatever it is worth, this is not an inconsequential development.

In an article I wrote in October last year, entitled “Fuel Subsidy and Fake Subsidy”, I had narrated an encounter I had with an industry player who gave me a lowdown on the crimes against humanity going on in the name of subsidy. He told me: “Fuel subsidy is the biggest fraud in the history of Nigeria.” He listed three aspects of the fraud. One, he said a fuel importer could bring in 2000 metric tonnes and claim subsidy for 8,000 metric tonnes. “The mark-up will be shared down the line,” he said. Two, he said NNPC always imports more than it has storage facility for. “So the product is stored at private tank farms. If NNPC stores 30 million litres with your farm, you don’t have to account for 10 million litres. There is a process by which you can account for only 5 million litres as long as you know how to share the proceeds of the remaining 5 million litres with those who matter.”

He listed the third aspect. “When they tell you the landing cost of petrol is N100 and the pump price is N65, it means the importer will get subsidy payment of a little over N35 per litre. There are different grades of PMS (petrol). They do not go for the same price. In the UK, for instance, the price of leaded petrol is different from that of unleaded. In Nigeria, we don’t distinguish between grades. We pay the same price. So the landing cost of the lowest grade may be N75, but the importer still gets a subsidy payment of about N35 instead of N10 per litre. Do the math. Multiply that by millions of litres everyday and you will understand the fraud. Remember too that the importers get paid for demurrage even if they don’t incur it. I can go on and on.”

When EFCC, acting on the report of the Aigboje Aig-Imoukhuede committee, listed the charges against the suspects at the Lagos High Court last week, I was not surprised at all. I was just angry that all the rumours and allegations we have been hearing in recent times were obviously not mere speculations after all. According to the EFCC, the accused persons obtained billions of naira for the importation of millions of litres of PMS but forged documents without supplying the product. The interesting thing is that the government officials who signed the documents to certify delivery of nothing, as it were, are also going on trial. All of them must go on trial, no matter who the father or mother or uncle or aunty is. With tempered optimism, I am very delighted that this is so and I am hoping that finally, in Nigeria, some justice will be done. I said tempered optimism.

I know what many people are thinking—the alleged fraud was perpetrated supposedly to fund political campaigns. In fact, some of the suspects are already reported as threatening to “expose” the sleaze. So many cynics will say these are just the “fall guys” being sacrificed to please Nigerians. This is exactly what I like about the whole saga. While not laying credence to the allegation that the money was indeed used for political campaigns, I am happy because the message is that those who are being used to loot our treasury should begin to realise that they will not enjoy protection forever. When it comes to sacrificing scapegoats, they will be the ones to take the hit. So they should begin to think twice. Whether you are a government official or a private sector player, never go to bed sleeping and snoring, thinking you are safe. One day, you may be called to account. The real message then is that when you are being told to do what is illegal and criminal, no matter who is asking you to do it, just say a capital NO. This idea that people cannot say NO is, at best, self-serving. People can say NO. And if you don’t say NO, you may be sacrificed when the bubble bursts.

Let’s be honest about this: much of the fraud being committed in the country could not have succeeded without active collaboration between government officials and the private sector. When they want to import PMS for fraudulent purposes, they get their allies in the private sector to bring in ghost ships and deliver ghost products. From Customs to PPPRA and NNPC and others, they sign all kinds of documents to take delivery of ghosts and skim the treasury of hundreds of billions of naira. The same set of people will go to church or mosque or wherever to thank God for their ill-gotten wealth, while our people continue to wallow in heart-breaking poverty. This is a country where ordinary people are dying because they cannot afford N1000 drugs. And this is the same country where these cowboys and cowgirls become overnight billionaires by importing ghost products. No wonder, private jets suddenly became the newest toys in town.

Millions of Nigerians are being made to bear a higher cost of living through the removal of fuel subsidy because we are told the bill is “unsustainable”. Now we know where the bulk of the fake subsidy is going. I ask: is that one sustainable?