Members of the House of Representatives, on Wednesday, uncovered the sum of N32.610 billion allegedly paid as subsidy on the premium motor spirit (PMS) imported by Sahara Energy Resources by Nigerian National Petroleum Corporation (NNPC).
The lawmakers during the resumed investigative hearing into the controversies trailing the subsidy regime between 2013 and 2021 also queried the $300 million for refinery rehabilitation stipulated in the DSDP contract agreement signed between NNPC and Sahara Energy.
Trouble started when Hon Sergius Ogun (PDP-Edo) demanded an explanation on the various payments in the documents on the ‘NNPC shortfall summary for June 2022’, which stipulated that Sahara energy supplied PMS totalling 122,373.88 metric tons.
In the same vein, the document on the ‘NNPC shortfall for July 2022’ showed that the company received subsidy payment of totalling 32,609,991,105.74 paid in two tranches for the supply of 29,000 metric tons and 60,000 metric tons under the CORDPA scheme.
To this end, the lawmaker requested the copy of the agreement with NNPC under the CORDPA agreement, as well as the full agreement on DSDP with NNPC.
On his part, Hon Gbillah after scrutinizing the documents submitted alleged that Sahara Energy only trade the crude oil lifted and purchase from other sources, adding that the company has failed to deliver the required PMS within the 35 days window for delivery of the product as stipulated in the agreement signed by both parties.
To this end, he requested details of “where the company gets its product from and whether the company has a refinery in Dubai or other locations, noting that in 2018 document signed on the 20th March 2019 through which a crude oil vessel lifted crude in the 23rd July 2018 but in that commensurate period I believe it is for that particular crude, that you already have a product from three vessels.”
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Hon Gbillah further requested details on where Sahara Energy sold to, crude oil to, where did you buy the PMS from, how much did you buy it and the size and names of the vessels that brought the PMS into the country and the duration of the products were brought into the country, adding that the documents showed the delivery exceeding the timeline of 35 days stipulated in the agreement.
He also requested for the payment made by the company within that duration. Did you pay $300 million to NNPC for refinery rehabilitation?”
In his response, Mr Cole who distanced the company from the controversial transaction said: “The document you raised is not our document, it’s reconciliation document and that is the only format it comes in. That document is the actual reconciliation document. It doesn’t have pages of references. It covers the period we have reconciled and that’s the same format NNPC and all the companies and other parties use.
“As I mentioned earlier, we have shareholdings in refineries both in Abidjan and Senegal, we have our own storage tanks in the middle east, in Amsterdam as well. So, we source products on various locations.”
“Regarding your question on Subsidy payment, at no point in time have we received any subsidy payment. I was even going to ask if the amount you mentioned are in naira because there is no naira in subsidy payment that NNPC makes. So, I believe that document. So, we have received zero payment from NNPC on subsidy.”
He also noted that the company “executed the contract signed with NNPC 100% in line with the terms and the regulations of the contract. I’m not aware of any payment for the refinery the honourable member mentioned and we are in no way shortchanging the value of the crude in any way whatsoever.”
Worried about Mr Cole’s submission, Hon Gbillah noted that: “you are not aware of your contract? It is in the contract. I’m really surprised, do you really have all the information that the company requires? I thought you said you are the CEO, for a contract you entered into with NNPC?”
Speaking earlier, Chairman of the Committee, Hon. Ibrahim Aliyu observed that there are fundamental issues raised by the Committee during the engagements that the company was demanded to give more clarification particularly to furnish the Committee with the incorporation status, addresses and profile of the company, country of incorporation and their partners, and affiliates and companies that they work with.”
“You will agree with me that the major reason for the summon was that their own legal status is being questioned and their documents are needed to proof that they are actually incorporated to do business in Nigeria, and then due procedures were followed before entering into agreement with Sahara Energy on DSDP.
“From the letter, they have made an apology on a letter dated 17th August, and they stated the inability due to delay in communication and stated that any documents requested will be so provided.”
He observed that the committee was mandated to the way subsidy issues are handled in this country and wanted an investigation into what goes around in the industry.
According to him, the committee was set up among others to ascertain the effectiveness or otherwise of the subsidy regime in Nigeria with particular emphasis on arrangement or agreement based on Direct Sales Direct Purchase, the swap and subsidy payments from 2017 to 2021.
He added that the Committee also resolved to conduct a total investigation into the activities in the industry governing the industry from 2013 to date, adding that the House relied on relevant sections of the 1999 Constitution specifically sections 88(1 & 2) and section 89 as well as the Petroleum Act, particularly section 32.
He observed that Sahara Energy participated in all four streams from 2016-2017, 2017-2018, 2019-2020 and 2021-2022, respectively.
The Chairman however observed that all the documents signed with NNPC on DSDP were signed as Sahara Energy Resources, adding that the “Committee is particularly concerned about the role you played as a partner in the DSDP, otherwise we have no business to do with any of your affiliates.”
Hon. Mark Gbillah noted that the committee has taken note of the statutory obligation of Sahara Energy DMCC as a foreign entity which was registered in Dubai and participated in the DSDP contract.
In his response, Mr Cole noted that the DSDP arrangement with NNPC is value for value arrangement whereby gasoline security first and foremost is guaranteed.
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