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Fuel diversion: FEC approves N17bn for product tracking device

Juliana Taiwo-Obalonye, Abuja

The Federal Executive Council (FEC) meeting, presided over by Acting President, Yemi Osinbajo, has approved the sum of N17 billion for the installation of technology monitoring schemes and structures under Petroleum Equalisation Fund (PEF).

Although the project is for three years, it is expected to start yielding positive results from 2019 when the 2020 budget will be prepared.

The device is for automated fuel management system and censor network, which the Minister of State for Petroleum, Ibe Kachikwu, said would help eliminate fuel subsidy scam as well as put an end to the conflicting figures as to the nation’s actual fuel consumption per day.

State governors, under the auspices of the Nigerian Governors Forum (NGF), had had some of the  recent Federation Accounts Allocation Committee (FAAC) meeting in Abuja deadlocked after rejecting the Nigerian National Petroleum Corporation (NNPC) remittances, which is usually shared equally among the three tiers of government.

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The NNPC had remitted N147 billion into the Federation Account in May, which the governors faulted was a far cry from the expected revenue, insisting the amount  does not reflect the current economic realities and prices of oil in the international market.

The governors also queried the amount the NNPC was claiming to have paid for petroleum subsidies.

But according to Kachikwu, President Buhari has mandated that, “the narrative is that we have all struggled with  this whole subsidy payment and how much is consumed in Nigeria, volumes of products moved out illegally and the whole impact on FAAC accounts.

The President has given a very serious mandate that we ought to rein in on his process. The essence of what PEF is doing is that this will enable us track refined petroleum product movement from the point of LC (Letter of Credit) opening from the vessels that come into Nigeria, up until the point where there are discharged into tanks in Nigeria, and from the tanks into trucks in Nigeria, monitor the trucks till they deliver the products into the storage tanks for the filling stations and there are discharged and sold.

“So, that will produce a 100 per cent holistic monitoring of these products. For the first time, we will be able to tell how much petroleum products we consume in this country. Because there has been so much going on in terms of the movement of consumption numbers from thirty something million litres a day to 70 million litres to 18 million litres a day during the difficult times.

“And the challenge the president has given me is to rein that in. Let’s know what we consume in reality; let’s know where these products are going and this process will be able to track every truck. So, a typical truck will be licensed with a driver, with a transport company, so if a truck misses, you can find the transporter and the company that takes responsibility…”

“So we expect this to be over a period of three years but we promise that within one year, the real effects of this will begin to show. Obviously, you need time to train and to continue to improve the system.

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We hope that by the time we start doing the 2020 budget in 2019, we would have got to a point where the losses you are seeing are being tracked and substantial impact will be made in monies that come into the federation account.

“It will help us keep proper data repository of consumption in this country, destruction, data on all trucks that operate, total number of products received, what is sold out of filling stations and it is going to be a collaborative system that involves NNPC, DPR and PPPRA but situate in PEF.”

The council also approved the revision of contract for the construction of the Nigerian Content Development Management Board (NCDMB) in Yenagoa, from N27 billion to N42 billion. The contract was awarded initially in 2015.

According to Kachikwu, “it is one of the dramatic skylines in Yenagoa and has gone quite substantially far.

The reasons for this increase was largely due to foreign exchange variables determinant, which was initially about N157 to a dollar but today it is N305 to a dollar and still counting. The whole idea is for the contract to be completed.

It is a 24-month contract and has fairly gone far. We hope that once that is done, NCDMB will stop paying rent in the series of buildings it rented in Yenagoa.

“But most importantly, the whole glamour of the South-south states during the Vice President’s visit to the Niger Delta with me and the Minister of Niger Delta, was largely to see oil companies during foothold in some of these South-south states.

The building is larger than what the NCDMB needs and already talks are on with AGIP and a few of them who want to position their presence very effectively in some of these areas.

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The council, also approved the sum of $150 million to tackle Polio in 12 states from the World Bank.

The Finance Minister, Kemi Adeosun, in her presentation at the FEC meeting, said the World Bank’s $150 million credit facility in support of the polio eradication and contract for the supply and installation of three units of Rapiscan Mobile Cargo Scanner-Eagle M60 were approved.

These include 30 months on-site service/support and maintenance, training of 120 officers and integration of Rapiscan Eagle M60 Scanners into Nigeria Integrated Customs Information System.

Adeosun said the proposed World Bank’s $150 million credit facility in support of polio eradication, is third additional financing to support substantial past investments.

The investments, she said, have paid off handsomely with the country now on the verge of polio eradication.

“The objective of the project is to assist the government of Nigeria, as part of a global polio eradication effort, achieve and sustain at least 80 per cent coverage with Oral Polio Vaccine (OPV) immunisation in every state in the country and improve routine immunisation.”

The project will be coordinated by National Primary Health Care Development Agency (NPHCDA) at the federal level and implemented in the 12 lagging states of Adamawa, Bayelsa, Gombe, Jigawa, Katsina, Kogi, Nasarawa, Niger, Plateau, Taraba and Zamfara.

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