The Nigeria’s petrol subsidy regime has continued to be a huge scam. Huge amount of monies spent with the state and citizens not having a clear understanding of what goes on in the subsidy payment. The only knowledge the citizens have on subsidy payment is that the scheme is a huge scam with corrupt practices at its peak.

The House of Representatives committee headed byFarouk Lawal to investigate the subsidy claims Report shows, N261.1 billion was expended in petroleum subsidy in 2006, N278.8 billion in 2007 and N346.7 billion in 2008. Five companies, including the Nigerian National Petroleum Corporation (NNPC), were involved in managing the subsidy in 2006; it rose to 10 companies in 2007; and 19 in 2008. Within a year under President Goodluck Jonathan, 121 companies were added to the subsidy management list, making a total of 140 companies in 2011.

In an attempt to shield the independent marketers who have colluded with the state to steal public resources in the disguise for subsidy payment, Mr. Lawal collected $62,000 bribe from Mr. Femi Otedola, the Managing Director, Zenon Oil. He was caught, arrested and suspended by the House of Reps in an emergency sitting convened by Mr. Aminu Tambuwal, the former House of Representatives Speaker. And, Mr. Farouk was later charged to court.

In 2011, NNPC paid N310.4 billion arrears of kerosene subsidy for 2009-2011. And this happened despite the president having in 2009 directed removal of subsidy on kerosene.

The Petroleum Revenue Special Task Force, an investigative panel committee constituted by the Federal Government and headed by Mr. Nuhu Ribadu, to investigate the subsidy regime indicted Nigeria National Petroleum Corporation (NNPC). The panel report shows that NNPC could not account for $1 billion paid to it by oil companies.

At the House of Representatives fuel subsidy probe, it was discovered how Accountant-General of the Federation paid N999 million 128 times within 24 hours, amounting to N127.8 billion to subsidy scammers, and, in spite of that, he failed to disclose their identities even on demand.

The presidential committee headed by Aig-Imoukhuede in its report made a recommendation for N382 billion refunds from 21 companies, while the House of Representatives report shows that N1.7 trillion went missing.

Four out of over 40 scammers who participated in the subsidy fraud have been convicted. Two of the convicts got 10 years imprisonment each. Ada Ugo-Ngali and her boss were convicted in January 2017 and Rowaye Jubril in March 2017. Besides the jail sentence, they are to make a refund of N755 million and N963 million respectively to the Federal Government.

At the 2015 presidential electioneering, Mr. Buhari, the current Nigerian president said there was nothing like subsidy, and, accused Mr. Goodluck Jonathan, the former Nigerian President of stealing from the state resources using subsidy scheme as a justification.

By December 28, 2015, Mr. Buhari said, his administration is not interested in subsidy payment and will end it forthwith. Responding to the president statement, on May 12, 2016, Mr. Ibe Kachikwu, the Minister of state for petroleum, announced that Nigerian state has removed subsidy. And, the outcome of this led to the increase of petrol pump price from N97 to N145. Corroborating this, Mr. Yemi Osibajo, the Nigeria’s Vice President, on December 15, 2016 assured that subsidy is now a thing of the past.

Within a short period the state made pronouncement that she has stopped paying subsidy, the state contradictorily announced that it has been paying subsidy to independent marketers. By December 22, 2017, Mr. Maikanti Baru, the NNPC Group Managing Director made public that the landing cost for petrol is N171.40 per a litre. And for Nigerians to buy petrol at the N145 approved price, the government now pays N26.40 per liter in extra cost.

At the resurface of petrol scarcity in December 2017, the (NNPC) admitted having spent N112.079 billion on petrol subsidy in 10 months, covering January to October 2017. Financial documents obtained from the NNPC by the Vanguard newspaper revealed.

Confirming the Vanguard report, NNPC monthly financial and operations 2017 October report showed that in January 2017, the corporation made N37.264 billion provision for under-recover payment, ‘a new name forsubsidy payment’.

In the current subsidy regime, NNPC pays itself for subsidy and not the oil marketers as has been the practice. NNPC says it paid subsidy from the profit made in the sale of domestic crude oil allocation. And, because of that the monies that ought to be remitted to the Federation Account is deducted by the corporation.

What this means is that, obviously Nigeria state still pays petrol subsidy.And this practice has continued with the state engaging in corruption and abuse of the process with total disregard to transparency and accountability. It is most worrisome that the 2016, 2017 and 2018 budgets made no provision for subsidy payments. The question therefore becomes, where is the state getting the monies it pays subsidy from? How is the payments calculated?Who are those benefitting and who authorized the payments?

Trying to justify the payments, the state argued, NNPC pays the subsidy and not the government.  What an elementary arguments that has no basis. NNPC is an agency thatbelongs to the state and takes directive from the state on how it spends its money on behalf of the state. Thus, the monies belong to Nigerian state and not NNPC, hence the state is not telling the truth.

It is not true that oil and gas sector cannot function effectively with the government at the core of management. It is simply that the state and its agents have internalized corruption in the sector and have defied every known model that seeks to reposition the sector. And this is mainly because, both the state and its agents in the sector benefit when corruption goes on. When that happens, accountability is not encouraged and primitive capitalist accumulation continues.

Let us remind those who argue that pure deregulation and private sector investment is the only way for effective oil and gas sector reform that they are not correct. Brazil has rubbished that argument by successfully managing Petrobras since 1953. Should we do not know, Petrobras controls major oil and energy assets in 16 countries in Africa, North America, South America, Europe, Asiaand has become one of the global leading oil producing companies today. What then are we arguing in Nigeria, corruption has taking the place of state ability to manage what we have and the outcome is the abysmal practice of subsidy regime we have at the moment.

Now what is the solution? Political will and nothing more.

Audu Liberty Oseni,
Publish What You Pay-Nigeria

The refineries Turn Around Maintenance (TAM) is one of the worst corrupt dealings entrenched in the Nigeria’s oil and gas sector. The deal is characterized with lack of transparency between government officials and their cronies. Over $20bn billion spent on TAM without a functional refinery in existence.

Agents of these corrupt act do not feel the consequences for their action, and if they continue to be set free, they will not change their actions and Nigerians will continue bear the predicament.

As the corruption ranges, Nigerian state is under pressure to explain to her citizens why refineries are not working for decades.

In 2015, the state via respective media said it has fixed the refineries and they are functioning optimally. Unfortunately, in 2017, the state admitted that the refineries aren’t working and set a committee to review and oversee the fixing and repairs of the refineries by 2019.

In the current oil and gas sector reform national debate, the citizens and the ruling class must understand that petroleum debate is so central that it has the capacity to shape the state polity. For instance, the discourse on how to address petrol issue played a fundamental role in the People’s Democratic Party (PDP) exit from power in 2015. And, it also has the capacity to influence the outcome of the 2019 presidential election.

In recent time, the state has resorted to the excuse of none availability of funds to fix the refineries and build new ones as justification for the refineries not functioning. However, there are indications that private sector wants to invest in the crude refining, although, this is yet to yield the desired outcome. One of them is the Orient Petroleum Refinery (OPR) in Anambra State. It was designed to produce 55,000 barrels of refined products daily. Mr. Goodluck Jonathan, former Nigerian president commissioned the project in 2012. Six years later, the refinery is yet to commence operation. Another is Dangote Oil Refinery and Petrochemicals. It is to commence production by 2018 with 500,000 barrels daily production capacity. Our hope is that it meets its deadline and comes into operation this 2018.

Mr. Goodluck Jonathan, former Nigeria’s President promised three Greenfield refineries as a core focus of his Transformation Agenda. Mr. OlusegunAganga, the former Minister of Trade and Investment, on behalf of Nigeria signed a memorandum of understanding, MoU, between the Nigerian National Petroleum Corporation, NNPC, and some foreign investors under an American-Nigerian joint venture to build six modular refineries at the cost of $4.5billion (about N700 billion).

Report from the Special Task Force on national refineries revealed that the number of licenses issued to investors to build refineries in Nigeria has increased to over 28, and in all, none of the licensees has the capacity to operate a refinery. The report further revealed, of the 42 oil refineries operating in Africa, the three in Nigeria are the worst in terms of efficiency and capacity utilization.

The coming of Mr. MuhammaduBuhari, the Nigerian president awaken the hope that the state refineries will be fixed. The state made no pretense over that. By November 2017, Mr. Buhari ordered NNPC management to immediately return the four refineries to efficient functionality.

In response to Mr. Buhari directive, Mr. NduUghamadu, General Manager, Public Affairs Division in a press statement said, all Nigerian refineries will work fully in 2017. This will be achieved because the four refineries will undergo comprehensive rehabilitation.

Contradictorily, Daily Trust reported NNPC to have set up 8 committees to fix refineries before 2019. Mr. MaikantiBaru, the Group Managing Director on inaugurating the committees charged them to ensure that the refineries return to efficient capacity by 2019.

Nigeria continues to be the only Organization of Petroleum Exporting Countries (OPEC) member that is wholly dependent on the importation of refined petroleum products.  This has continued to be the situation despite OPEC stipulation of 80 percent domestic needs in refined petroleum products must be met by domestic refining capacity among member countries. This is to ensure that among the member countries, on the average, only 20 percent of domestic use is imported. Thus, Nigeria being an OPEC country, to what extent have we satisfied this clause? We absolutely failed in this regard.

It becomes fundamental to interrogate why Nigerian oil and gas sector has remained eternally dilapidated.  The only answer is corruption. A pointer case is, over $20bn has been spent on Turn Around Maintenances (TAM), and nothing to show for it. And we continue to import over 80 percent refined petroleum product.

On the assumption of office in 2015, Mr. Buhari, the Nigerian president assigned the Nations minister of petroleum to himself. He argued, the huge task of addressing the corruption in the country’s oil sector compelled him to assign such task to himself.

However, evaluating the oil and gas sector under the current Buhari regime takes one to a hopeless situation. It does appear, the rot in the sector is so systemic that Buhari has lost idea completely on what to do. Although the arguments have been that since Buhari was a former Head of State, Petroleum Minister, and having established four refineries in the past, being a president will give him the opportunity to address the rot eternally. Unfortunately, unfolding events have proven this line of argument wrong.

We erroneously allowed the President to have arrogated huge responsibility he cannot handle to himself. Yes, we did. Mr. Buhari is not a petroleum engineer, a technocrat and a specialist in the oil and gas sector. Thus, why are we surprised that we are not seeing results? We would have pushed for the president to appoint a person with a reputable knowledge in the economics of oil and gas. When that happens, the sector will be properly managed and some of the major challenges will be addressed.

Although there are numerous solutions that have been proffered, the only one that will address the issue is political will. Since Abacha’s exit, none of the regimes including that of Mr. Buhari have shown the political will to address the rot in the oil and gas sector.

What we have seen is every presidency bringing his cronies and arrogating experts’ title to them to justify why they will be allowed to pilfer the state in the guise of managing the sector. All the clamor for a holistic reform in the oil and gas sector that will lead to effective delivery has been abandoned by the state, hence we continue in the mess.

Audu Liberty Oseni:
Publish What You Pay-Nigeria.

The Publish What You Pay-Nigeria (PWYP) supported by CORDAID, Netherlands to implement a project, “Ensuring Environmental, Social and Human Rights Impacts Assessment (ESHRIAs) in the Niger Delta” trains policy influencers on strategic communication.

The training targeted Civil Society organizations, the media, MDAs as well as members of PWYP across the federation. The core objectives of the training was to identify key policy actors, institutions, individuals and organizations who are change agents  that will work with other agents and individuals to achieve the desired outcome in the above project. And, train them on strategic communication and approaches aimed at influencing policy on ESHRIA.

As part of the efforts to achieve effective and sustainable impact, PWYP-Nigeria, had a partnership with collaborated with Human Right Commission, National Environmental Standard and Regulatory Agency, National Oil Spillage Detection and Response Agency, Ecological Fund Office.

The Nigeria Extractives Industries Transparency Initiative (NEITI) latest Oil and Gas report shows only 5.6% of crude oil went to refineries in 2015. It also shows revenue from oil and gas declined from $54.5 billion in 2014 to $24.8 billion in 2015.

In 2014, oil production fell from 798 million barrels to 776 million barrels in 2015 the report reveals.

The report reveals, the overall outstanding revenue as at 2015 was $3.7 billion, with incurred lossesstanding at $2.2 billion. The revenues that could not be reconciled stood at N317 billion.

Nigeria suffered 54.6% drop in oil revenues and a marginal 2.7% fall in oil production. The diredrop in the unit price of crude oil in the international market is solely responsible for the development the report alluded.

The five years analysis carried out by the report shows revenues declined by 8%, 7.7% and 6% in 2012, 2013 and 2014 respectively. However, the decline increased to double digits in 2015 when total revenue dropped by more than half.

Total oil production also dropped from 798 million barrels in 2014 to 776 million barrels in 2015. This was a result of oil theft and militancy.

However, total gas production went up by 20.23% from 2, 593,090 mmscf in 2014 to 3, 250, 667 mmscf in 2015.

Total oil lifted in 2015 was 780 million barrels, about four million barrels higher than the amount produced with the balance drawn from previous years the report reveals.

In the 780 million barrels, oil companies lifted 467 million barrels while NNPC lifted 313 million barrels.

And in all, only 8.7 million barrels which amounts to 5.6% of crude oil allocated for domestic consumption went to the refineries in 2015 on account of the state of the refineries.

Source: The Nigeria Extractives Industries Transparency Initiative (NEITI)

For the implementation of Extractive Industries Transparency Initiative (EITI) global requirement which mandates member states to conduct an audit of the extractive sector, the Nigerian state established Nigeria Extractive Industries Transparency Initiative (NEITI). NEITI undertakes a regular audits report of the Nigerian extractives sector. The reports examine physical, financial, process audits of the oil and gas sector and the monies the extractives companies pay to the government with what government declares it receives.

Since Nigeria signed on to EITI membership, NEITI had carried out respective audit reports focusing on oil, gas and solid minerals. Findings from the reports show that Nigeria in the last 10 years lost at least ‘US$2.6 billion in the sector as a result of corruption.

NEITI audit reports, clearly point out remediation issues that will impact policies, legislation, and operational procedures that will check corruption in the extractive sector if adequately implemented.

Over the years, the Nigerian government has not implemented the remedial issues while corruption in the extractive sector worsens. Civil society, citizens and the media seem not have adequate knowledge of the remedial issues which form key advocacy on extractive sector reform.

Thus, the need to adequately carry out advocacy on the remedial issue and engage key policymakers to implement the NEITI remedial issues was the basis of the training organized in Enugu by PWYP-Nigeria.

Developing and leading the advocacy on the NEITI remediation audit findings, building the CSOs capacity to undertake NEITI remediation audit findings advocacy and to engage key policymakers on addressing the NEITI remediation audit findings were the core aims of the training.

Over 35 CSOs participated in the training, PWYP-Nigeria believes that if we have CSOs and citizens with the required knowledge and capacity to carry out advocacy on remediation and NEITI audit outcomes, the corruption in the extractive sector that has led to the loss of revenue will drastically reduce and the reform in the sector will be achieved.

The Nigeria’s downstream sector over the years has witnessed huge challenges. These range from mal-administration, inefficiency and corruption across the value chain. From the refineries to transportation/distribution and marketing of petroleum products are marred with huge obstacle. The four refineries in Nigeria are working below capacity.  Policy inconsistency, lack of planning, perennial fuel scarcity and inefficacy in getting the petroleum product to the end users have been some of the apparent challenges.

Obviously, Nigerian state has not done well in maximizing the huge potential in her oil and gas sector. And, the downstream sector is the most hit. The citizenry has not benefitted much from the oil and gas, and this is because, we have consistently failed to get the economics and the value chain linkage of the sector appropriate.

Rather than address the confronting challenges in the sector, we politicize them. However, one of the apparent effort state has done to reposition the sector is deregulation. The market fundamentalists argue that deregulation is the only way out. To them, it will allow for the removal of government control on petroleum products prices and remove restrictions on the establishment and operations including refining jetties and depots. It will also allowprivate sector to engage in the importation and exportation of petroleum products.  And when this happens, it will allow market forces to prevail and open up the sector for effective competition.

Refining petroleum products locally continues to pose a challenge, in spite of the state four refineries, we have below 30% production capacity while we import over 80% of refined crude for local use. The refineries turnaround maintenance targeted at fixing the refineries has always been shadydeal characterized with corruption. And, private sector who wishes to invest in the refinery cannot do that arising from state policies and infrastructural deficit that do not encourage investment in the sector. However, we hope that Dangote refinery currently under construction will spur private investment in the oil and gas and change the narrative.

As refineries turn around maintenance continues to pose a challenge, subsidy payment has been a mega fraud where corruption has been internalized. For instance, in the Farouk Lawan Committee Probe (2012), Over N232 Billion on subsidy paid to Marketers for PMS in 2011 not supplied, 31Million Liters per day as opposed to marketers claims of 60 Million Liters.

The Nigeria Extractive Industries Transparency Initiative(NEITI) Audit 1999 2009-2015 reports show how corruption is embedded in the Nigeria’s oil and gas.  NNPC is found to have the sum N 1.40 Trillion. Also, Presidential Verification Committee on Subsidy Administration (2012)in 2011 shows 197 subsidy transactions worth N229bn were illegitimate.

Also, the NNPC recently have been subsidizing fuel at a heavy loose to the economy and the industry. The most glaring aspect is that it is shrouded in secrecy therefore not meeting the necessary transparency and accountability required for the development of the sector.

There are benefits to a deregulated downstream sector. These include to; ensure that petroleum products are made available to the consumers in an uninterrupted manner, eradicate waste and corruption which are consequences of tightly regulated economy, ensure that the supply and distribution of petroleum products are orderly and consumer-friendly, Channel money realized from the exercise to development projects that will be beneficial to the majority of the people. Others include job creation, cost efficiency, non-hoarding of fuel; investment in new facilities- storage tanks, retail outlets trucks, competition among marketers, expansion of facilities, jobs creation and importation of products than sole dependence on the government.

However, deregulation of the sector without getting some parameters right is what the opponents of deregulation and removal of fuel subsidy are against. Some of their argument include living a critical sector to the market forces and individual and the protection of the poor from the high cost of fuel prices.

From the foregoing, deregulation would serve as a catalyst towards normalizing the crunch in the downstream sector and maximizing the benefit from the downstream sector to the citizenry.


Ogwu Paul Okwuchukwu

Communique issued at the end of a 2-day National Multi-Stakeholders Workshop on strengthening civil society engagement in Extractive Industries Transparency Initiative (EITI) organized by Publish What You Pay (PWYP) Nigeria held at Grand Central Hotel, No. 1 Bompai Road, Kano.

Date: January 30 to 31 2018.


  1. Preamble

Determined to involve critical stakeholders in moving the activities of EITI forward, Publish What You Pay (PWYP), Nigeria organized a two-day multi-stakeholders workshop on strengthening the Civil Society engagement in EITI standards.

Participants were drawn from the Civil Society Steering Committee members of NEITI, the media, academia, professional bodies, NEITI, and PWYP members across Nigeria. Also, in attendance was the EITI International Board member, Faith Nwadishi.

In an opening remark, Mr. HarunaHadejia, PWYP North West Zonal Coordinator welcomed participants and expressed appreciation for their ability to travel a long distance to participate in the workshop. That shows how important they value the work PWYP does.

  1. Objectives of The Workshop

The workshop had the following core objectives.

  1. To improve civil society participation in EITI processes.
  2. Engage EITI process and trickle it down to communities.
  3. Improve multi-stakeholders’ involvement in the EITI process


  1. Areas of Priority

At the workshop, participants identified areas for core advocacies in the EITI validation process in Nigeria. They are;

  1. Accountability of all transactions in the extractive sector.
  2. Data accessibility.
  3. CSO participation.
  4. Contract transparency.
  5. Community engagement.
  6. Gender and extractive


  1. Observations

At the workshop, participants made the following observations.

  1. It is difficult to achieve contract transparency in the extractive sector in Nigeria. Although, there are legal frameworks that regulate contracts in the industry, however, they are not always complied with.
  2. Nigerians find it difficult to know the exact quantity of crude the country produces.
  3. Oil theft is not limited to illegal refining, IOCs have been found to be culpable of oil theft in Nigeria.
  4. At the moment, EITI application standards in Nigeria are faced with numerous challenges.
  5. CSOs and citizens often concentrated on transparency, without adequate attention on accountability. Experience has shown that transparency alone does not deliver good governance, it must come with accountability.
  6. CSOs do not engage the mining community enough
  7. Royalties on Solid Minerals are paid based on the quantity sold instead of quantity produced.
  8. Metering of the crude oil lifted is difficult, the IOCs give us any figure they choose


  1. Recommendations
  2. Government should ensure that citizens know the exact quantity of crude produced and lifted daily.
  3. Besides transparency, environmental and human rights issues must begin to dominate discourse around EITI standards.
  4. The civil society needs to demand accountability alongside their strong demand for transparency.
  5. CSOs should make sure all facts are crosschecked and are correct before engaging in advocacy.
  6. Host communities should be directly involved extractive contracts negotiations.
  7. Host communities should participate in developing Community Development Agreements (CDAs).
  8. In mining, child rights protection must be giving utmost priority henceforth.
  9. Environmental impact audit should be participatory.
  10. There should be standard of measurement for solid minerals.
  11. There is the need to amend the constitution to allow states co-own and manage solid minerals in their domains.
  12. Governments harmonize and address the issue of double taxation in the mining sector.
  13. Unlicensed miners should be formalized, form cooperatives and obtain licenses to mine.


  1. Endorsement

Mr. Egbule Peter: National Coordinator, PWYP-Nigeria
Mr. MuttakaUsman: a professor of economics, Academic Staff Union of Universities (ASUU) representative in the NEITI Civil Society Steering Committee.

Miss. Barala Bashir: Media, Freedom Radio, Kano.