Deziane Alison-Madueke has alleged that her life is being
threatened by members of a powerful cabal who benefited from
petroleum subsidy fraud.
The Nigeria’s first female Minister of Petroleum Resources and first
female President of OPEC, said the cabal is resisting the reform in
the sector.
According to her, despite her role in reforming the oil industry in
Nigeria to the benefit of all, she found herself in the mucky water
of Nigerian politics mostly in last few days of President Goodluck
Jonathan’s administration.
In a three phase interview in London with freelance journalist
reporting for African Free Press, Allison-Madueke bares her mind
on how she reformed the oil sector in Nigeria and why the oil
cabals are on her throat.
Except
Honourable Minister, thank you for granting me a few minutes of
your time for this pressing discussion about the future of policy
evolution in Nigeria. But I want you to quickly talk about the fuel
scarcity that has come just weeks before the hand-over to the new
administration.
The time of my appointment as Minister of Petroleum Resources
five years ago was a time when the nation was in the throes of
many years of continuous fuel scarcity and the abandonment of our
fuel facilities. This was having such an adverse impact on the
masses especially in terms of livelihood and quality of life. This
situation certainly affected me and my household. I was one of
those who went out to queue at filling stations and what left an
indelible mark on me was the plight of the many, many women who
were queuing for this essential commodity for their families. We are
looking at time when women where losing their lives as a result of
adulterated products as kerosene stoves were exploding all over
the country. So the problem was not just about getting access to
the product but also purchasing the right quality products to
ensure the safety of the households of my fellow women. It was a
time when cars were ‘knocking’ engines, generators that cost
hundreds of thousands of naira were also breaking down because
of adulterated products. People around the country were losing
many millions of Naira as a result of loss of business incomes and
we are talking of taxi drivers, face-me-I-face-you traders in the
market, the lorry drivers transporting food to the markets, the
okada drivers – basically the engine room of the economy was
affected.
I am a mother and grandmother myself and I understand the
pressure that women go through in order to put food on the table
for their families. I am very sensitive to the struggles of the Nigerian
woman. So, when granted the opportunity to serve the country as
Petroleum Resources minister, I made this my first priority. Dealing
with the fuel scarcity was a key issue that I resolved to address as
soon as I stepped into office. Nigeria is a country that relies on
access to petroleum products for businesses to thrive, for families
to survive and for communities to evolve. For me it was a
fundamental issue. I immediately set to the task. Several inter-
ministerial committees were formed to get to the root of the matter
including liaising with marketers and the unions.
A few things were identified such as the process of payment to
marketers as well as the improvement of the distribution and
monitoring mechanisms. The Ministry of Finance is charged with
addressing the payment process while the Ministry of Petroleum
Resources and its parastatals tackle production, distribution and
monitoring aspects.
So what did you do in terms of tackling the issue of access to
products?
Firstly sectorial reforms were put in place, and an attempt was
made to establish a uniform pricing regime across the country,
which still requires task forces to be put in place to oversee its
success. Secondly, an aggressive strategy was completed to build
as well as refurbish over 23 Nigerian National Petroleum
Corporation (NNPC) depots across the country many of which had
lain fallow for several years. This is the result of the determined
efforts of the Pipelines and Product Marketing Company (PPMC), a
subsidiary of the NNPC. The aggressive establishment of the depots
occurred from Aba to Benin, from Gusau to Suleja, in an attempt to
ensure a more robust delivery of products, to not only those areas
but also all contingent areas. Thirdly many vandalized pipelines
have been restored and expanded in addition, fuel products are now
transported by rail where possible to ensure that the products get
to the depots in good time to avert situations of shortage.
Furthermore, NNPC now holds and maintains a 30-day stock of
PMS, as part of the National Strategic Stock Reserve for products.
The Ministry has also increased the flash point for DPK (kerosene)
from 44 to 45 (curbing the incidences of kerosene cookers
exploding) – I cannot remember the last time a kerosene cooker
has exploded; implemented inspection of trucks at each NNPC
Depot for cleanness (preventing contamination) and lab testing of
truck samples for quality control. DPR also introduced colour
coding for all trucks loading any petroleum product this means the
trucks cannot be used for any other purpose apart from what it has
been coded to load. Many Nigerians will attest to the fact that
before now, the country has been “wet” with products with even
filling stations in remote areas, able to dispense products.
I also led the roll out of robust measures to identify and penalise
those behind the activities of fuel adulteration as well as pipeline
vandalism, in a joint effort between security agencies, the NNPC
and the Department of Petroleum Resources (DPR). The first joint
meeting between the key parastatals, the Service Chiefs and
Inspector General of Police took place at the Oriental Hotel. It was
the first meeting of its kind in the history of the sector.
So if all these measures have been put in place why has there been
this crippling fuel crisis?
The fuel scarcity that we see today I can only describe as the ‘fear
of the unknown’ in these last few days before hand-over. It is also a
backlog following the attempts by the government to stamp-out the
subsidy fraud and clean the system in November 2011. Identifying
and cutting out up to 92 marketers who had been round-tripping
reduced the subsidy payments by about 50%. This also brought
about a few delays in payment, as the investigations to identify
erring marketers were robust and took time.
We are faced with a situation where the marketers want this
administration to pay them ALL the money they are owed before the
tenure runs out on May 29. This is a difficult situation more
peculiarly because this administration did not incur ALL the debt,
which actually goes back 40 years. It is a rolling obligation. There
has never been a time, when the debt obligations was reduced to
zero it is cyclical. What the marketers are asking for is not just the
outstanding amount to be paid but also for the exchange rate
differential that they have incurred. This is in the light of the many
conversations that are on going about deregulating the subsidy
payments. The transition period is allowing the marketers to try to
forestall any losses as a result of a change in regime, while this
makes good business sense it is the polity that suffer. The Ministry
of Finance and the presidency are giving this situation the priority it
deserves.
The fuel scarcity was mingled with strikes by different unions
(Major Oil Marketers Association of Nigeria (MOMAN), Nigeria
Union of Petroleum and Natural Gas Workers (NUPENG) etc.) what
is going on?
The strike was about two things. First the union workers were
demanding for salary increases at a time when the NNPC’s running
cost is already extremely high. How are we going to increase
salaries when we are currently looking at ways to cap expenses and
more especially keep things in a consistent and clear state for the
new regime that is coming into effect.
Secondly, the strike by the NUPENG arm of NPDC has come about
following the decision to move NPDC from a sole operator model to
a joint operatorship model for some of its assets. This was done to
increase the production volumes from those assets, which had
remained consistently low for some time. The reason production
has been low is as a result of the sheer cost that NPDC has had to
bear in operating the assets. These joint venture partners that have
been brought in to alleviate the cost pressure are operating under
extremely stringent terms to ensure that the ownership of the
assets remain with the government. The companies have also had
to take out huge loans with moratoriums of up to 10 years in order
to perform their activities to successfully meet the production
volume expectations. So in many ways this situation can be
regarded as a win-win for the government, NPDC and the JV
operators, which would begin to yield great benefits for the
generality of Nigerians, as the boost in volumes would inevitably
lead to a boost in the nations revenue from the sector.
I am sincerely pleased that the unions have come to this realization
and taken into consideration the sufferings of many millions of
Nigerians during the period of the fuel scarcity. It was truly a
heartbreaking time for me… heartbreaking as fuel scarcity is one
issue I consistently fought to avoid given its impact on women and
their families as well as businesses. Yes, I am very happy that life
will begin to return to normal across the country as we have the
National Strategic Stock Reserve ready to be distributed across the
country.
Lets talk about some of the allegations that you face with regards
ensuring stability of supply across the country more specifically
about the debate on the subsidy. The memory of Occupy Nigeria is
still distant but we see this same situation by marketers holding the
country to ransom?
Let me start by making the distinction that the decision as to
whether subsidy payments are made or not is entirely economic
and outside my purview as Ministry of Petroleum Resources. What
we are responsible for is the production, distribution and marketing
aspects. What we also do is give a view as to the status in terms of
these 3 areas and the decision becomes an economic one from the
Presidency.
In terms of my direct actions in November 2011, following the high
incidence of subsidy claims, with a stroke of the pen, I removed 92
throughput marketers from the PPPRA scheme because we believed
that within the group were the round trippers who were causing
problems for the country in term of the burgeoning levels of subsidy
payments. As a consequence of this action, the amount of subsidy
payments dropped by over 50%.
A series of probes where kicked-off to investigate the transactions
of these marketers and to begin to bring in a level of accountability
and transparency into the system of subsidy payments. The lists of
these marketers were also published in the local press and a series
of probes ensued. The marketers had to justify their claims to the
payments. This was the first ever-major cleanup of the subsidy
programmes and yet again the ministry was vindicated and
offending marketers are going through the legal implications of
their actions.
The Petroleum Products Pricing Regulatory Agency (PPPRA) was
also restructured and the processes in place for the determination
of subsidy payments were comprehensively reviewed.
But these actions led to major push back by many with accusations
of corruption against the ministry and NNPC to get us to back
down. I am sure I stepped on the toes of the greedy cabals that
have dominated the sector for years, upset at the change in the
system. The push back has come from many other sources beyond
the marketers. The funny thing is these are the same people that
shout corruption the loudest but yet are unable to accept the
reforms that are being put in place to make the sector more
accountable so we are almost caught between a rock and hard
place in the sector.
[The minister at this point puts her hands on her head and sighs]
In fact this is where the bane of my problems as a woman in
government began. I wonder why people seem to want to put a tag
of corruption against my name when all I have ever tried to do is to
open the sector up for more Nigerians and make it work better for
the benefit of the country. If I were corrupt would we have achieved
the extent of reform that has occurred in the sector to date? Ah my
brother, I have worked tirelessly to curtail the excesses while
ensuring that the country remains wet with products and the sector
run more efficiently. I have constantly ignored the viciousness and
focused on my job.
The most important point to make in terms of stability of supply is
that today, marketers have a clear contract to deliver their products
on specified dates. Marketers are put under strict terms to deliver
products at dates specified if they miss the cut off date for delivery
then their cargo goes into demurrage which in itself acts as an
incentive to ensure supplies.
More recently, as part of the transition activity I have instructed
that all of the swap operators across the board provide detailed
and clear reports about their export and import activities so that a
reconciliation can be conducted and published for all Nigerians to
see. These swap transactions involve extremely high volumes and
huge cost obligations to banks. The contracts with these operators
are very stringent indeed and delivery specifications clear. There
are serious ramifications to the operators for non-delivery most
especially by the banks for non-delivery this is dependent generally
on the lines of credit arrangements.
This is being done as part of my commitment to accountability and
transparency to Nigerians. It will also put to bed the various claims
in the press about different alleged practices by the operators that
are being associated to me. The operators deal with the NNPC
according to tight contractual agreements.
All the swap operators were well vetted and passed as credible
Nigerian corporations capable of executing such major stringent
contracts with no room for any offences to the system. So when you
have strict contracts in place and bank obligations it is surprising
that mischief-makers can say that I am in league with some of
these operators in acts of corruption! It shows that they have no
idea how the system works and I would ask that they educate
themselves before they speak. If Aiteo, or any other operator were
cheating the NNPC it would be made public as the system has been
reorganized to do this automatically. The publication of the
reconciled transactions from the time the contracts were assigned
to them will also be a testament to this commitment. Erring
contractors will be made to face the legal implications of any
wrongdoings that are uncovered.
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