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The Senate joint committee on the Petroleum Industry Governance Bill (PIGB)is proposing a 10-year jail term, forfeiture of petroleum products and facilities for oil marketers who engage in economic sabotage.
Economic sabotage in terms of the bill, is seen as actions that violate the terms and conditions for licenses granted an oil company or marketer, or a failure to comply with the directions of the minster with regards to fuel importation.
This is conveyed in the Senate report on the bill due for passage this month, seen by BusinessDay. These recommendations are stiffer than the six-month prison term or the option of N10 million fine on conviction, proposed in the draft PIGB bill submitted to the National Assembly for consideration by the Ministry of Petroleum Resources.
“Any person who fails to conform or to obey a direction issued by the Minister under paragraph 8 of the First Schedule to this Act, commits an offence and is liable on conviction to forfeiture of the petroleum product and facilities, subject of the offence and to imprisonment for a period not exceeding ten years,” says the amended section of the PIGB.
Explaining the reason for the amendment, the committee said it is to properly reflect the gravity of the offence as economic sabotage.
Nigeria lost billions of dollars through scams in the petroleum products import subsidy regime between 2009 and 2012. The Federal Government paid oil marketers subsidy for 59 million litres of petrol per day when the country’s daily consumption is less than 35 million litres. Diezani Alison-Maduake, who superintended the petroleum ministry at the time, has a corruption case pending in court.
In 2011 alone, Nigeria spent N2.5 trillion on fuel subsidy, a 900 percent increase from the N245 billion that was budgeted for subsidy in the 2011 budget. Nigeria only secured a 10-year conviction in January this year, for a marketer, Ada Ugo-Ngali, the managing director of Ontario Oil and Gas Ltd, who was convicted for defrauding government of N754 million in subsidy payments.
In the wake of this conviction, analysts have called for a strong political will to deal with corruption in the oil sector. The Federal Government is also urged to improve transparency.
The Natural Resource Governance Institute, (NRGI) a transparency watchdog in the energy sector, states that lack of transparency in the oil sector breeds corruption.
“While treaties, laws and other legal documents defining the relationship between governments and private companies are public, contracts between governments and oil, gas and mining companies are often shrouded in secrecy,” says the organisation.
“They are usually unavailable to citizens in the countries where mining and drilling take place, and they often contain confidentiality clauses that explicitly limit public access.”
At the International Anti-Corruption Day 2016 in Abuja, last December, Waziri Adio, executive Secretary of the Nigeria Extractive Industry Transparency Initiative (NEITI) disclosed that Nigeria earned N70 trillion from oil between 1999 and 2014 consequently, the sector also has the highest concentration of corruption cases.
“The oil and gas sector is a very strategic sector to our economy because this is where much of our revenue comes from. It is conceivable that 90 percent of the corruption in the country is either happening in that or out of the proceeds of that sector,” Adio said.
Further recommendations by the Senate committee include the removal of the powers of the president and petroleum minister to award oil blocks, which is vested in the proposed regulator, the Nigeria Petroleum Regulatory Commission (NPRC).
