FG grants fresh supply contracts to companies accused of fuel subsidy fraud

Nigeria has expanded its list of fuel suppliers to include companies previously named in a multi-billion-dollar subsidy fraud investigation, leaving large global trading houses empty-handed, according to Reuters.
Nigeria, which relies on fuel imports because it lacks the capacity to refine its own crude oil, tried to remove fuel subsidies last year but was forced to partially re-instate them, after a wave of strikes and protests.
A parliamentary investigation later found the subsidy’s administration had facilitated around $6 billion of corruption over three years, with half the approved fuel imports never arriving or being sold to neighbouring countries.
“The government has taken some measures to improve controls,” Marc Gueniat of Swiss NGO, The Berne Declaration, which campaigns against corruption in the developing world, told Reuters.
“But the fact that certain companies accused of participating in the fraud are continuing to benefit from allocations raises the question of whether the political will to change is sincere,” he added.

Nigeria’s gasoline subsidy soaked up 1 trillion naira ($6.2 billion) last year, equivalent to 20 per cent of the federal budget and exceeding a budgeted N888 billion.
The list of gasoline importers compiled by Reuters using information from five sources showed around 3.4 million tonnes was allocated for the third quarter to more than 40 companies, expanded from 30 last year.
The list showed four companies that failed to cooperate with parliament’s probe were named as suppliers. These were Nepal, Fresh Synergy, Ibafon and Techno, which the parliamentary report showed collectively claimed for subsidies of nearly $60 million.
Nepal’s website lists its CEO as barrister Ngozi Ekeoma who has twice been arraigned by the Economic and Financial Crimes Commission (EFCC) in relation to fraudulent subsidy payments. At least three other companies awarded third-quarter allocations – Masters, Matrix and MRS – were also ordered to account for their shipments or refund alleged falsely claimed subsidy money in another government report released last June.
Nigeria has already spent $1.2 billion on subsidy payments this year and economists say any sign of a spike in subsidy costs could risk Africa’s second largest debt issuer spending oil savings or widening its budget deficit.

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