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Nigeria Terminates Auditor Services in Fuel Subsidy Payments

Nigeria ended audit services for gasoline subsidy payments by accounting firms Akintola Williams Deloitte and Adekanola and Co. and appointed a group headed by Access Bank Plc (ACCESS)’s Chief Executive Officer Aigboje Aig-Imoukhuede to examine claims by fuel importers, the Finance Ministry said.

The government has been “concerned about the management of the subsidy regime” and is “finalizing a new and more effective system to replace the current arrangement,” Paul Nwabuikwu, a ministry spokesman said today in an e-mailed statement from the capital, Abuja.

Africa’s biggest oil producer relies on imports to meet more than 70 percent of domestic fuel needs because of a lack of refining capacity, according to the Petroleum Ministry. Since 2006 the government has regulated fuel prices by paying importers the difference between the cost of imported fuel and pump prices.

A parliamentary committee on April 19 recommended that gasoline importers including the state oil company Nigerian National Petroleum Corp. refund 1 trillion naira ($6.3 billion) they received in fuel subsidy payments it considers illegal. Payments totaling 2.5 trillion naira in fuel subsidies were made in 2011 through a process “fraught with endemic corruption and entrenched inefficiency,” a House of Representatives committee that investigated the subsidies said in a report submitted in Abuja.

President Goodluck Jonathan’s attempt to end the subsidies on Jan. 1, citing escalating costs, sparked a weeklong national strike. In response, the House of Representatives started a probe of subsidy payments between 2009 and 2011.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

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