At least 137 billion naira of bridging allowance is unaccounted for by the Petroleum Equalization Fund (Management) Board, an analysis by DATAPHYTE has shown.
DATAPHYTE analysis reviewed the NEITI’s Fiscal Allocation and Statutory Disbursement (FASD) audit report from 2012 to 2016 as well as the Nigerian Bureau of Statistics (NBS)’s Petroleum Import Statistics from 2010-2015.
While NEITI’s FASD document reported PEF(M)B between 2012 and 2015, received a total of N381.8 billion, the calculation using the NBS report revealed the agency should have generated at least 519 billion nairas from three major petroleum products imported within the period under review.
The Petroleum Equalization Fund Management Board PEF(M)B
The Petroleum Equalization Fund Management Board PEF(M)B acts as a revenue-generating and disbursement agency in the oil and gas sector of the country. The Board was established to manage the operation of the Petroleum Equalization Fund (PEF). Mr Ahmed Bobbo is the current executive secretary of the Board.
The PEF which was established to ensure uniform prices of Petroleum Products throughout the country. This is achieved by reimbursing a marketer’s transportation differential for petroleum products movement from depots to their sales outlets.
The Revenue of PEF
The sources of revenue for PEF include bridging allowance, net surplus revenue recovered from oil marketing companies amongst others. Between 2012 and 2016, it received a total of N499 Billion according to the audit report. The FASD audit report below shows the revenue of the PEF for the period under review.
Receipts from Bridging allowance for the years under review was 381.8 billion naira. The bridging allowance accounted for close to 77 per cent of the total revenue of the agency. Despite this huge revenue pull, the bridging allowance was under-reported from their books of account.
According to NEITI’s description, “the importers/marketers are grouped into three categories: Major Marketers, Pipeline and Petroleum Marketing Company (PPMC) and Depot & Petroleum Product Marketers Association (DAPPMA). The contribution from each category is shown in the table below.
Estimated Revenue from Imported Petroleum Products Report
Bridging allowance is the payment made by all licensed importers/marketers to PEF. It is paid on the quantity of petroleum imported into the country. It should be noted that the bridging allowance is not negotiated but a compulsory payment made by all licensed marketers. This is based on the amount of petroleum product that is imported.
Currently, the rate is N6 per litre of imported petroleum products.
The report of the number of imported petroleum products published by the Nigerian Bureau of Statistics (NBS) and the expected revenue that the PEF is to get at 6 naira per litre of petroleum products imported are given below.
This table shows a huge difference in the revenue projected by the PEF in their audits as reported by FASD and what they were expected to realize as bridging allowance i.e. 382 billion naira as against 519 billion naira.
This gives a deficit of N137 billion not reflected in their account.
The Probing Observation
Two possible questions come readily to mind. First, was the said amount actually collected from the marketers? If yes, the said amount was not reflected in the books of account audited by NEITI.
Secondly, if the money was not collected, then it speaks to the inefficiency or the inadequate capacity of the agency to carry out the responsibilities of generating revenue.
Nevertheless, the federal government needs to investigate the 137 billion naira expected revenue of PEFMB which is unaccounted for