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Nigeria: Subsidy Fraud Incorporated – Fresh Scandal Surrounds FG’s Committee


AllAfrica

Parliamentarians involved in subsidy scam.

By Jide Ajani

July 22, 2012

ANALYSIS

This will shock you. It is the report of Sunday Vanguard’s painstaking investigation with sources inside Aso Rock Presidential Villa, the Nigeria National Petroleum Corporation, NNPC, the Petroleum Products Pricing and Regulatory Agency, PPPRA, the Petroleum Equalization Fund, PSF, and the Petroleum Support Fund, PSF, just to mention a few.

It is about the serial complicity of some operators in the oil industry, government agencies and high ranking government officials in a mélange of corrupt practices occasioned by cover ups, deception and deliberate misinformation to unsuspecting members of the Nigerian public. It is a story of conflict of interest regarding those investigating and verifying the claims of marketers, a story of filth and willful negligence fueled by insatiable greed.

It was an innocent memo; but panic oozed from it.

The genesis of what has today become the fraud in the management of subsidy funds all started with a directive from the Federal Government of Nigeria. Although the House of Representatives Committee which investigated the management of subsidy on petrol presented its report which has become mired in scandalous controversy, occasioned by a bribery saga, the several committees set up by the federal government may not be about to get to the root of the matter by calling a spade a spade – there is the Nuhu Ribadu committee set up by the Nigeria National Petroleum Corporation, NNPC; there was the Aigboje Aig-Imoukhuede committee; and now there is another committee which just submitted its report penultimate weekend, headed again by Aigboje Aig-Imoukhuede.

Switching into a panic mode, the Peoples Democratic Party, PDP-led government of late President Umaru Musa Yar’Adua, sensing that long queues at the petrol stations across the country represents a clear and present national security challenge, sent a memo to the Petroleum Products Pricing and Regulatory Agency, PPRA. This was in October, 2008.

Dated October 20, 2008, the memo, signed on behalf of the then Secretary to the Government of the Federation, from the Presidency came through the SGF’s (PARASTATALS DEPARTMENT, GENERAL SERVICES).

The reference: SGF. 19/S.53/II/

The title of the memo: “RE: OUTCOME OF THE STAKEHOLDERS MEETING ON IMPORT PLAN FOR 4TH QUARTER, 2008/REVIEW OF PSF IMPLEMENTATION”.

“I am directed to refer to your letter Ref. No. A.1/1/228/C.7/III/468 of 16th October, 2008”, the content of the letter reads, “on the outcome of the stakeholders meeting of 14th October, 2008 to harmonize import plan for November and December, 2008 and to convey the approval of the Secretary to the Government of the Federation for:

“1) The import plan for November – December, 2008 as harmonized with the marketers during the stakeholders meeting and as recommended; and

“2) The participation of the recommended companies with storage facilities or valid throughout agreement that have completed the necessary due diligence processes to import the products in order to sustain adequate supply in the system.

“I am to further inform you that you are required to submit a report on the performance of the participating companies to this Office at the completion of the import exercise.

“Please accept the warm regards of the Secretary to the Government of the Federation”.

What had happened just before that memo was that the PPPRA had recommended that there was need for an expansion of the frontiers of fuel importation into the country and had, therefore, requested an approval from the Presidency.

Whereas possession of storage facilities was an earlier condition precedent, the need to include importers who had valid throughout agreement, with a view to making the product more available became inevitable.

In fact, some of the marketers who preferred to speak on conditions of anonymity made it clear that most of the “so called major marketers were actually in agreement with other lesser known importers who took the risk of financing and importation of petroleum products”. But this was to open the floodgate.

HOW SUBSIDY FRAUD IS COMMITTED

One of the major points where the fraud is committed is the Atlas Cove Jetty, Apapa, Lagos, which is Nigeria’s major delivery and re-distribution point for refined petroleum products. The second, strategic, point is represented by the plethora of depots in Lagos.

Atlas Cove, first built in 1979, and rebuilt by Julius Berger in 2000, is owned and managed by the Pipelines and Products Marketing Company, PPMC, on behalf of Nigerian National Petroleum Corporation, NNPC, as a storage farm/facility that channels refined products through System 2B pipelines that runs through Ejigbo (a suburb in Lagos). These pipelines supply petroleum products to the entire Western region of Nigeria, Kwara and Edo States. Depots served by the Atlas Cove Jetty include Mosimi, Ore, Ibadan and Shagamu. The Atlas Cove Jetty is also used to off-load coastal vessels as well as pump petroleum products to the Atlas Cove Depot for storage.

This command center for refined petroleum products is administered from Abuja by the PPMC, a subsidiary of the government owned NNPC.

A very dependable source at Atlas Cove told Sunday Vanguard that the country had always been held hostage by the petrol import cabal in connivance with the government that claims to be serving and protecting Nigerians.

A source said what has been in place at Atlas Cove can best be described as “round-tripping, as some of the marketers with allocation for importation are involved in the scheme.

According to the source, “they bring in a particular amount of refined product, declare the product on arrival to the relevant government agencies’ staff (DPR, PPPRA, Petroleum Equalisation Fund, PEF) and after these officials have okayed the product quantity in preparation for subsidy application, about half of the product originally meant for domestic consumption would then be diverted to other neighbouring West African states”.

In the case of private depot owners, “some of them doctor the figures they submit with a view to making undeserving claims. The quantity of products discharged some times does not tally with the inflated figures that are recorded.

It is one big, very big conspiracy. The importers are involved; the depot owners are involved; the people who are supposed to verify the claims are also involved. People collect subsidy for what they did not import. That is why the figures and claims keep going up. Those involved know themselves; and those to whom they make returns also know themselves. It is for government to dig deep and find these people out”, the source concluded.

Had it been limited to these categories of people alone, the corruption associated with the subsidy funds may not have assumed the humongous nature it assumed. But there were all manner of petty crooks in the toga of government officials and importers as well as depot owners who doctored records.

For instance, those with “valid throughout agreement that have completed the necessary due diligence processes to import the products” also connive with depot owners to make illegitimate claims.

CAUSE OF PANIC BY FG

Back to the FG’s memo of 2008! Before the memo, there was beginning to appear at gas stations across the country long vehicular queues. The PPPRA, Sunday Vanguard has been made to understand, designed a seemingly “more flexible import plan” which accommodated a few more companies.

There was need for the federal government to approve the arrangement made by PPPRA. That was the message conveyed by the letter from the Office of the SGF.

But it was not a magna charta for PPPRA to enthrone a regime of recklessness.

However, what was to follow was to create its own muddle.

On January 21, 2009, the federal government decided to reduce the pump head price of petrol.

The consequence of that was the creation of even longer queues.

Importers and marketers began to complain and there was need for the federal government to address their concerns.

Therefore, through the PPPRA, the FG summoned a ‘Technical Committee’ meeting of stakeholders. The meeting was held on Thursday, January 29, 2009.

A source in the Office of the SGF made Sunday Vanguard understand that the meeting needed to be called because “the government of the day was beginning to feel that there might be sabotage because of the growing shortage of petroleum products”.

At the meeting that day, there were representatives of NUPENG, PPMC, MOMAN, DPR, PENGASSAN, Ministry of Petroleum, IPMAN, TUC, CBN, DAPPMA, and a host of other stakeholders. It was at that meeting that marketers complained of the removal of standard deviation from the PPPRA Template.

After the meeting which lasted hours, resolutions were reached.

A copy of the resolution obtained by Sunday Vanguard reads: “On the issue of exchange rate, it was agreed that the CBN Marginal Rate plus 1% CBN commission and 1% bank charges should be added in the Template.

“Members agreed that the Freight Rate based on the 2009 World Scale will be considered

“For the financing cost element, it was agreed that the PPPRA should confirm bank interest rates and other charges that make up the cost and come up with a submission.

“Members agreed that the PPPRA should adopt the weighted average of Port Charges (NPA), on the Pricing template.

“Members agreed that the PPPRA should update the Pricing template with the reviewed parameters, and present same to the next meeting for consideration.

“The meeting advised that recommendation should be made on the need to dialogue with the NPA with a view to reducing their charges.

“In addition, the PPPRA may also seek intervention in the FOREX by exploring the possibility of a special window for an exchange rate for the wet products that capture a reasonable rate that guarantees predictable products importation”.

The resolutions of this meeting were conveyed to the federal government in a letter with reference number A3/9/118/C.7/T/84, on February 5, 2009.

However, typical of government activities in Nigeria, there was no immediate response.

This was at a time when the federal government brought down the price of petrol from N70 to N65. This led to serious shortages and queues were once again back at the filling stations.

Sunday Vanguard was informed by an industry source that the PPPRA “was instructed by the Office of the Honourable Minister of Petroleum Resources to immediately address the Marketers complaints with a view to eliminating long queues at the filling stations”.

It was in addressing that challenge that some smart Nigerians, made up of bankers and government officials, along with importers began to make the kill, as disclosed above.

COMMITTEES APLENTY AND CONFLICT OF INTEREST

The probe into the shady deals was first instituted by the Senate under the chairmanship of Senator Magnus Abe. Then came the drama of the House of Representatives’ Committee on Subsidy Management, with Hon. Lawan Farouk as chairman. The Senate Committee is yet to conclude its work. But the Farouk Committee which concluded its work has been entrapped by s bribery scandal involving a member of President Jonathan’s Economic Management Team, EMT, Femi Otedola of Zenon Oil and Gas,

Sunday Vanguard was informed last week in Abuja that the banks were also part of the problem, including the Central Bank of Nigeria, CBN.

Of particular interest is one of the banks whose Chief Executive is involved in some form of remedial activities being engaged by the FG.

Pouring through tones of documentary evidence, Sunday Vanguard was exposed to a verity of LETTERS OF CREDIT ostensibly opened for the transaction of fuel importation.

And whereas it could not be established during this investigation that the banks were directly involved in any form of “sharp practices”, according to a source, “the status of the committees chaired by Aigboje Aig-Imoukhuede of Access Bank can not escape the tar of conflict of interest”.

Whereas there was documentary evidence to prove that, like most other banks, Access Bank was involved in the financing of businesses conducted pursuant to importing petrol, the choice of Aig- Imoukhuede as the chairman of two committees involved in the verification of claims regarding subsidy does not in any way present the FG as conducting its investigations in an unbiased manner.

Firstly, some marketers and industry sources disclosed to Sunday Vanguard that “conducting a verification exercise the way the first committee set up by Ngozi Okonjo-Iweala, Finance Minister and co-ordinating minister for the administration’s EMT did, revealing that over N400billion should be refunded to the government, a sum which the committee said constituted wrongful payments, how would anyone explain the fact that the chairman of the committee also runs a bank that was involved in the business of financing importation of petrol?

“It was because some importers raised an alarm about the unfairness of the first committee by not allowing them to come forward and defend themselves that made Mr. President to set up another committee but again with the same individual as its chairman. This is not about the person of Aig- Imoukhuede but, in coming to equity, there is need to come with clean hands. It does more harm than good to the FG to appoint the chief executive of a participating bank to verify subsidy claims. Some of us know what Aig-Imoukhuede represents but it is not even in his interest to chair such a committee. Nigerians are watching and the insinuation is already there that all these is about man-know-man”, the source said.

Reminded that some of those who benefited from the subsidy wrongly are being prepared for prosecution, the source, who is one of the major importers, maintained, “Who does not know what will happen at the end of the day? Some of those that would be arraigned would be the ones who are not connected. Yes, some people would be prosecuted but the real issue here is the role of conflict of interest.”

When you add up the Senator Abe Committee, the Farouk Committee, the Ribadu Committee, the first Imoukhuede Committee and the second Imoukhuede Committee, the question to ask is, where would all these lead?

In addition, the role of the Economic and Financial Crimes Commission, EFCC, is gradually coming to light as inside sources say the commission is about to break loose.

HOW NOT TO TRACK SUBSIDY ROUGUES

Yet, investigations have revealed that there is a very simple (even simplistic) approach to tracking the subsidy thieves.

A very dependable source inside Aso Rock Presidential Villa disclosed to Sunday Vanguard that on December 24, 2010, a near scandal almost broke out when the PPPRA issued a “Request for a notarized Letter of undertaking on accuracy of petroleum products supply and evacuation records”.

The Presidency source disclosed that the move to ensure that all petroleum products importers and depot owners sign an undertaking of performance was first rebuffed.

“It was an attempt at ensuring that depot owners and importers do not engage in what has now become the sharing of the subsidy loot. When we got hint of the move, it was seen as a welcome development by some but again, there was need to ensure that a dislocation is not created in the supply chain for the availability of products as this was coming close to an election period”, the source said.

Even at that, Sunday Vanguard was able to discover that all the importers and depot owners were made to sign the undertaking that they would be straightforward in their dealings.

In fact, the undertaking that was signed by the importers and marketers also had penalties which, apart from leading to prosecution, also has the stringency of forfeiture of depots in the event that records are not accurate. Now, the PPPRA introduced a checklist.

Nigeria: FG, Oil Firm to Establish Two Refineries Worth U.S.$4.5 Billion


AllAfrica

By YEMI AKINSUYI,

July 9th, 2012

The Federal Government has signed a Memorandum of Understanding (MoU) with the Petroleum Refining and Strategic Reserve Limited (PRSR), a renowned America-Nigeria joint venture, for the construction of $4.5 billion two modular refineries in the country.

Each of the refineries, expected to be completed and launched within 12 to 13 months, would refine between 30,000 and 60,000 barrels per day (bpd) of crude oil, and produce five million litres of petrol, diesel, kerosene and LPFO per day.

Minister of Trade and Investment, Olusegun Aganga signed on behalf of the federal government while the chairman of PRSR, Chief Edozie Njoku, endorsed for the company at a brief ceremony held at the ministry’s conference room in Abuja.

In his remarks, Aganga said the new agreement was part of the government’s National Industrial Revolution Plan aimed at ending the exportation of raw materials and jobs from Nigeria to the West, while encouraging the transformation of the raw materials and exportation of finished goods, which add value to the economy.

Aganga said: “This is part of the paradigm shift we talk about. We have to stop exporting crude oil and therefore we need more refineries. With the signing of this deal, I am sure the two refineries which will cost about $4.5 billion will be launched in a year’s time”.

The minister, who reiterated the government’s determination to improve the business climate and make Nigeria the preferred investment hub in Africa and globally, informed that the firm had a history of performance and trusted track records; having delivered on bigger projects in Russia and other countries.

He assured the firm of government’s technical support needed to accomplish the task, saying that the Nigerian National Petroleum Corporation (NNPC) was actively involved in the deal.

Aganga, while justifying private sector involvement in government’s transformation agenda, informed that the Eleme Petrochemicals was now 30 times more productive than when it was in the hands of government.

Also speaking, the Chairman of PRSR said the two refineries were part of a 30-month plan to construct six modular refineries in strategic places in Nigeria, pointing out that his firm would build simple refineries, “that will help tackle the problems of Nigeria as against the existing complex refineries.”

Njoku added that the six refineries, when completed, would have a combined capacity to refine 180,000 barrels of crude oil within the country and produce up to 30 million litres per day of refined oil products within 30 months.

The chairman said: “The refineries would be operated for the benefited of Nigerians by eliminating the current subsidy regime and significantly reducing the current market prices of kerosene and diesel by as much as 50 per cent”.

“During the construction timeline, over 10, 000 Nigerians will be employed and once operational, the six refineries will create over 150,000 direct and indirect jobs”, he added.

On the possibility of completing the pilot refineries on schedule, he explained that “modular refineries are comparatively easy to assemble in a relatively short time period”, adding that the company would produce.

Speaking in the same vein, the company’s technical partner, Graham Ford, described Nigeria as investment destination and expressed their readiness to partner the country to overcome its perennial crisis in the oil sector.

Semafo Shuns Quebec For Africa To Double Its Gold Output


bloomberg.com

By Frederic Tomesco

June 5th, 2012

The Quebec government plans to spend C$47 billion ($45 billion) to attract mining investment over the next 25 years. Benoit La Salle, a former aid worker who runs Montreal-based Semafo Inc. (SMF), sees more opportunity in Africa and is braving military coups and mine invasions to drive the company’s expansion.

“Africa is the new frontier,” La Salle, Semafo’s chief executive officer, said in a telephone interview. “That’s where you’ll find the most favorable geology.”

The operator of three gold mines in Burkina FasoGuinea and Niger, is betting it can double output in the next five years with its current properties as it scouts for acquisitions. Semafo produced about 250,000 ounces of the metal last year, and plans to reach 500,000 ounces to become Canada’s ninth-biggest producer based on 2011 production.

“Here in North America, we’ve been exploring for 300 years and there really isn’t much left in the ground,” La Salle said from Montreal. “Burkina Faso has seen seven mines built in the last five years. It’s been several decades since we saw that kind of activity in Quebec.”

Semafo, coming off a record year for net income and gold sales in 2011, said May 15 that first-quarter net income jumped 55 percent to $28.1 million as gold production reached 60,900 ounces. Total cash margin jumped 34 percent to $1,002 an ounce from a year earlier as gold prices averaged $1,694 an ounce…Read more.

Libya, U.S. Probe Oil-Company Deals


The Wall Street Journal

By Benoit Faucon, Summer Said, and Liam Moloney

April 8, 2012

New Government Aims to Shed Light on Petroleum INdustry‘s Interaction with Gadhafi regime

Authorities in the U.S. and Libya are investigating oil giants such as Italy’s Eni SpA and France’s Total SA over their past relations with the fallen Libyan regime, potentially casting a cloud on the companies’ ambitions to expand their foothold in the country with the largest oil reserves in Africa.

Last year, a civil war that toppled Libyan leader Col. Moammar Gadhafi nearly shut down the country’s crude production, stressing global oil markets. But as oil-company operations return to normal, the probes may complicate the oil companies’ business in the country.

The Libyan general prosecutor’s office is investigating “Libyan and foreign operators in Libya” for possible “financial irregularities,” its deputy head, Abdelmajeed Saad, said in an interview.

In a March letter reviewed by The Wall Street Journal, the prosecutor’s office formally asked the head of audit at Libya’s National Oil Co. to supply oil-company documents. The letter mentions oil transactions between NOC and international traders Vitol Group and Glencore International PLC as examples of documents it is seeking. Though the Libyan probe focuses mostly on the Gadhafi era, the letter indicates that the request involving the traders includes the period of the country’s civil war through the present.

The companies investigated also include Eni, the biggest foreign oil player in Libya, and Total, Mr. Saad said…Read more.

Senegal cancels fishing authorizations


AllAfrica.com

May 3rd, 2012

Press Release

PRESS RELEASE

Dakar, Senegal — Greenpeace welcomes the decision of the Senegalese government to cancel licenses of pelagic fishing vessels issued to 29 foreign trawlers from Russia, Comoros, Lithuania, Saint Vincent Grenadine and Belize.

“These kinds of licenses are a direct threat to employment and food security for millions of Senegalese who have been dependent on fishing for centuries,” says Raoul Monsembula, Oceans Campaigner, Greenpeace.

West Africa‘s fish stocks are severely pressured by over-exploitation, mainly by destructive high-tech Russian, Asian and European vessels that can in a single day capture, process, and freeze 200-250 tons of fish.

“This corresponds to the fish consumption by at least 9,000 Senegalese during afull year” (1) FAO 2007.

Greenpeace has, for the last 18 months, called for the cancellation of the licenses and less than a month ago, the Greenpeace ship Arctic Sunrise was patrolling the waters of Senegal and Mauritania to put the spotlight on the systematic plunder of West African waters by foreign vessels. “Most of the trawlers encountered by the Arctic Sunrise were European vessels or in some way linked to Europe, including Russia(2).

On 27 April, EU Fisheries ministers got together in Luxemburg to discuss the reform of EU fishing rules, known as the common fisheries policy (CFP), but failed to take necessary steps to tackle the excessive fleet capacity of the European fishing fleet. “The same week as the fisheries ministers failed to make progress on fisheries reform, the EU had to cancel the permits for its vessels in Mauritanian waters months before time simply because these giants had used up their quota in no time, says Pavel Klinckhamers, Oceans Campaigner of Greenpeace. “If European ministers really want to tackle the issue of a bloated fleet, they have to act now and choose sustainable, low impact fisheries,” he argues.

Greenpeace urges the government of Senegal to declare an emergency moratorium on the allocation of fishing licenses, as a sustainable policy has not yet been defined. Greenpeace also calls on European governments and fisheries ministers to support a new Common Fisheries Policy that tackles Europe’s bloated fleet by scrapping the most destructive and oversized vessels, including factory trawlers operating in the waters of developing countries (3).

1. Source FAO, 2007.

2. From15 February to 15 April 2012 Greenpeace completed an expedition in Senegal and Mauritania to highlight overfishing. A total of 71 vessels were observed and three out of four were found to have parent companies in either EU or other non-EU European countries. More than a third bore the flag of an EU country and another third were sailing under flags of convenience. In Senegal, as much as 90% of the vessels were in some way linked to Europe, mostly Eastern Europe, (including Russia) and in Mauritania, this was the case for 80%.

3. The European Common Fisheries Policy, CFP, is supposed to ensure sound and sustainable fisheries. The reality is that it has failed. The same extensive and destructive fishing fleet which has pushed Europe’s fish stocks to the brink now allows European fleets to hoover up fish form seas outside of Europe, including in West Africa. A full review of the CFP, which takes place every ten years, is currently under way and provides a unique chance to end overfishing by EU vessels, in and outside of Europe, and begin the transition to sustainable low-impact practices.

Canceling Out The ‘Background Noise’ On Egypt-Israel Relations


Minnesota Public Radio

by Dana Farrington, National Public Radio

April 29th, 2012

By ending a historic gas contract with Israel, is Egypt laying the groundwork for a fundamental shift in relations? Not quite, says Rob Malley of the International Crisis Group.

Malley, program director for the Middle East and North Africa, talks to NPR’s David Greene on Weekend Edition about last week’s announcement, which raised questions of political rifts. Malley says:

“What we’re seeing right now is a lot of noise, but no real change, partly because — if not essentially because — both the Israelis and the Egyptian security establishment believe that the relationship is critical for both of them.”

Israel and Egypt signed the historic Camp David peace treaty in 1979, and The Associated Press reports:

“While relations have never been particularly warm, the quiet border has been critical for the security of the two neighbors. Egyptian energy exports to Israel and other business ties have helped keep the peace.”

NPR’s Sheera Frenkel reports for Weekend Edition that the gas deal was signed in 2005 and intended to last for at least 15 years. Reuters calls it “the most significant economic agreement to follow” the 1979 treaty and Jordan’s treaty with Israel in 1994.

Israel has been getting about 40 percent of its gas from Egypt, according to the AP, yet Egypt said last Sunday that it was ending the gas contract. Government spokespersons in both Israel and Egypt are trying to downplay the issue as a dispute between two companies rather than a threat to the peace treaty, Frenkel reportsRead more.

The Winter Kabimba – Led Mission of Inquiry Into the Energy Regulation Board


UKZambians

By Mr. Brown Chibale Kapika

April 22, 2012

The Kabimba led Commission over the Energy Regulation Board Investigations involving more than 2 trillion kwacha oil procurement embezzled by named former government officials was the best and brave commission of inquiry Zambia has ever had since independence.

This Kabimba – led Commission of Inquiry came out with a very strong conclusion and a warning message to the Nation. It was not a witch hunting, but a real statement containing real facts including amounts of figure in millions, Contracts signed, Tender numbers, Names of Suppliers or Companies, Dates, Cargos, and all names of former government officials involved in this scandal.

However, I, as President of Adedo Zamucano and on behalf of Zambian People, recommend Mr. Kabimba and his group who sacrifice their time on this national duty for a job well done. I also thank President Sata for his courageous step he took to appoint Mr. Kabimba to head the commission of Energy Regulation Board Investigation…Read more

By Mr. Brown Chibale Kapika (BCK)

President for Adedo Zamucano Political Party – Zambia

Inquiry urges independent body to purchase oil stocks


Zambia Post

By Kombe Chimpinde

April 21, 2012

THE commission of inquiry into the procurement of oil has recommended that an autonomous institution be given the mandate of purchasing the country’s crude oil stocks.

This proposal outlined in its key recommendations, is in view of irregularities and corrupt practices in the procurement of oil established by the commission during its public sittings.

A source has revealed that the Wynter Kabimba-led commission recommended that the government considers coming up with another body with competence and capacity to be responsible for the effective procurement of petroleum products for the country.

The commission recommended that government consider as soon as possible the commission of a feasibility study to determine the most feasible model for the government to the private sector as the case in Tanzania and South Africa,” the source said.

The source revealed that the commission also recommended for forensic audit of the Ministry of Energy on contracts for procurement of commingled petroleum stock awarded between 2007 and 2011.

“Other recommendations were for a forensic audit to be conducted at the Ministry of Energy on the construction and rehabilitation contracts of fuel storage tanks at Ndola Fuel Terminal and selected provincial depots to establish the actual cost of this infrastructure,” the source said.

“The commission has stated that government should also consider changing the tax regime and fees on petroleum products from ad valorem (percentage based) to fixed or absolute amounts in order to bring revenue predictability and reduce tax burden on the final consumer in the light of fluctuating international oil prices.”

The commission also recommended for the reviewing of the mandate of the Energy Regulation Board (ERB) whose operations were also scrutinised by the commission of inquiry.

The inquiry report has revealed corrupt practices in the procurement of oil between 2007 and 2011 where former president Rupiah Banda and his son, James, and some former senior government officials have been recommended for investigation over the K2 trillion oil procurement loss.

Sources revealed that the commission had recommended to law enforcement agencies to investigate Banda, James and other named public officers at the then Ministry of Energy and Water Development and Zambia Public Procurement Agency (ZPPA) in relation to various listed procurements contracts.

Also cited in the report are former energy minister Kenneth Konga, former permanent secretaries in the same ministry, Peter Mumba, Teddy Kasonso, Buleti Nsemukila and former information minister Lt Gen Ronnie Shikapwasha.

ZPPA former directors Samuel Chibuye and David Kapitolo, secretary in the Central Tendering Committee (CTC) at ZPPA Justine Matimuna and director in the Ministry of Energy, Oscar Kulumiana, among others.

Ten foreign firms bid to supply Zambia oil


March 30, 2012

* Current supplier Glencore among bidders

* 12 for separate diesel, petrol supply tender

(Reuters) – Ten foreign companies, including Glencore Energy UK Ltd, have tendered to supply oil to Zambia for a period of two years starting this year, the public procurement agency said on Friday.

The oil should be configured to Zambia’s 24,000 barrels-per-day Indeni refinery, which does not process pure crude oil.

Zambia in February invited tenders for the supply of 1.4 million tonnes of oil after the expiry of a contract with Glencore under a two-year arrangement from March 2010.

Hazel Zulu, the Zambia Public Procurement Agency spokeswoman said Mercury Energy Trading (SA), Agipol Africa Limited, Gunvor (SA) and Crown Hill Investments Limited had also put in bids.

Others are KenolKobil Limited, Trafigura PTE Limited, Vitol SA, Independent Petroleum Group Company of Kuwait and Addax Energy SA, she said…Read more.

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