Fresh facts have emerged on how some corrupt officials in the Nigerian
National Petroleum Corporation (NNPC) and some Oil Marketing and Trading
(OM&T) companies defraud the Federal Government through the fuel
subsidy scheme, THISDAY has learnt.
The Aigboje Aig-Imoukhuede Presidential Committee that verified subsidy
claims had identified the use of dead or decommissioned vessels by fuel
importers as a major infraction through which some marketers defrauded
the government.
THISDAY has however gathered from sources on the committee that there
were five other fraudulent ways used by importers to short-change the
government.
One of such ways, it was learnt, was through product round tripping or
double dipping, which involves the importation of products to fulfil
supply contracts to NNPC.
Investigation revealed that after the presentation of documents to NNPC
as evidence, the products were diverted by corrupt officials of the
corporation to another vessel by ship-to-ship transfer.
“A fresh bill of lading is generated, new Form ‘M’ established and the
same product is supplied to Nigeria a second time under the petroleum
subsidy scheme. The products which have already been paid for by NNPC
are then used to claim subsidy from the government.
Effectively double dipping into the nation’s pocket,” explained one of the sources familiar with the deal.
The second fraudulent means of defrauding the scheme is by what is known in industry parlance as Onshore Tank Back-Loading.
By this, genuine importation of products actually takes place and the product is discharged into onshore tanks in Nigeria.
However, after the discharge, the vessel berths at the jetty and the
product is loaded back onto the vessel and exported out of the country
where it is sold by the importers to recoup their initial funds outlay.
The original documents are later presented to the Petroleum Products
Pricing Regulatory Agency (PPPRA) and subsidy is claimed for products
that were not sold in the country.
There is also land order smuggling where genuine importation of
products also takes place but the product is trucked across a land
border for sale outside Nigeria at near international market price.
The shipping documents, it was learnt, are then used to claim subsidy for products that were not sold in the country.
Some NNPC officials and private marketers are also allegedly involved
in what is called bills for collection round tripping, which is very
commonly used along with fake vessels declaration.
A source, familiar with the deal, explained to THISDAY that the
importer would claim that they have access to foreign credit facilities
or their own foreign currency resources to finance their importation.
“The fake vessel is declared on the Form ‘M’ and bill of lading
containing false vessel information is generated. The documents are
presented to PPPRA and subsidy is collected for products that were never
imported into Nigeria. The subsidy profit is then used to remit scarce
foreign exchange out of Nigeria,” he said.
Another major fraud popularly referred to as “Rice and Beans,” is perpetrated using the kerosene subsidy scam.
It was gathered that due to the excessive profit made on kerosene
imports, importers of kerosene illegally mix the kerosene with diesel,
popularly called “Rice and Beans” to create adulterated diesel at a much
lower cost than the landing cost of unadulterated diesel. The
adulterated diesel is then sold at slightly below diesel market price.
THISDAY gathered that the ‘Rice and Beans’ diesel is the cause of the damage being done to heavy duty trailers and generators.
