Fraud in fuel subsidy claims in Nigeria being investigated

Nigeria’s finance ministry announced that it would not pay subsidies to fuel importers suspected of having committed fraud. The ministry listed 21 local firms and vowed not to back down despite union strike threats. A presidential committee led by Access Bank Chief Aigboje Aig Imoukhuede is verifying all fuel marketers’ claims before the finance ministry pays them any subsidy; unions, which are largely controlled by the companies, threatened to strike unless payments were released.
The finance ministry believes that those behind the strikes are marketers being investigated for potential fraud. Nigeria is among the top 10 crude oil exporters in the world but due to decades of corruption and mismanagement, it has to import most of its refined fuel needs.
Fraudulent fuel traders collected subsidies from the government
A US$6.8 billion scam in involving fuel administration has been uncovered by a parliamentary probe in April according to news reports. The scam is one of the biggest corruption scandals in the country’s history. The committee found that fraudulent marketers were either claiming subsidy for fuel they never delivered or that they sold to the country’s neighboring states; yet there were fuel shortages in the capital Abuja in August. It was theorized that some marketers withheld deliveries resulting in the shortage.
Finance Minister Ngozi Okonjo-Iweala condemned the act, calling it “blackmail.” She declared that “these elements have now resorted to hiding behind the unions to unnecessarily antagonize government and create hardship for Nigerians … No degree of blackmail will stop the government from doing its work.”
A committee tasked by President Goodluck Jonathan to investigate suspected fuel traders discovered that NGN382 billion (US$2.4 billion) in subsidy payments were fraudulently collected last year. As a result, in January Jonathan tried to end the fuel subsidy which economists branded as wasteful and corrupt. However, a week of strikes and protests over petrol prices forced him to partly reinstate the subsidy program. (August 18, 2012)