PIB will determine fate of Petroleum Equalisation Fund? — Kasali

Mrs. Adefunke Kasali

The Executive Secretary, Petroleum Equalisation Fund, Mrs. Adefunke Kasali, speaks with OKECHUKWU NNODIM on measures being adopted by the body to curb fraudulent bridging claims made by petroleum marketers

Is your organisation getting the cooperation of petroleum marketers in the new project of stopping fraudulent bridging claims?

Generally, we’ve had a very good relationship with them. When the Project Aquila came on board, people started getting their money promptly and more people came into the business. Now we have written to Independent Petroleum Marketers Association of Nigeria to say if any marketer is not a member of the association, he cannot do business with the PEF. We have involved IPMAN and NARTO to check all forms of lapses. We are closing the door slowly to make sure the processes are transparent because we are accountable to Nigerians in all that we do.

I had a meeting with the President of IPMAN and he volunteered to get all his own trucks registered. By June, we will cancel or disable all former tags that are out there. The idea is that you must get a new one and we know that with the new one, you cannot get two. However, one thing I have learnt is that when people are making noise about you negatively, it is because you are stopping them from doing that wrong thing they have been doing.

What initial measures did you adopt to curtail illegal bridging claims?

One of the things that we did was the appointment of the asset and truck company. We did it with public tenders and we got all the bids needed and eventually selected a company. The company was to act as our agent to tag the trucks. The tag was supposed to act as an information storage facility. During that period, our thought was that if we had our own personnel directly tagging the trucks and learning to use Project Aquila, the processes would take so much time. So, we got a separate company that we would give the tags to. The company will follow our procedures in tagging the trucks, while we pay them for the services.

When we started, it was well received. I remember very clearly one marketer coming to us to say ‘Madam, this thing is good; marketers are getting their money in less than five days. So, in 2012, we expanded it. When we first started, we concentrated only on Conoil, which was our pilot organisation. But in April 2012, we expanded it to other marketers and by January 2013, we went into it in full.

Why did you decide to modify the tagging measures?

By March 2013, we began to feel like something was wrong. The first thing we started to see was that people were either coming back to report that their tags were being stolen or they were losing them. To address this, we came up with a penalty, but that was the wrong thing to do. We thought we could put something that would act as a deterrent, but it didn’t work out. Those who were not happy with this, especially people who were doing the bridging by air before, capitalised on it and leaked into the market that the tags contained mercury or they had chips in them that could be used to make free phone calls.

As a result of this, the stealing of the tags escalated. Drivers would come to us and say people came to them at gun point to demand for the tags. When we started getting these complaints, we had a rethink of the whole strategy. Many marketers even alleged that some of our employees were culpable and that they were beginning to fly the tags in. That gave me sleepless nights. I wondered how this could happen.

However, the tags weren’t costly. When we bought them, it was with N1,100. So, it wasn’t like the tag itself was expensive.

What did you do to address this problem?

We came up with the idea of marking the body of each truck with something that a machine could read. Our IT guys went to work and we found out that the tag was the weakest link in the project; otherwise the project was well thought out, well implemented and well executed. We knew some of our workers had to be involved because marketers were coming to us to make such complaints. One of the things we saw was that they were stealing the tags and they were taking them to the company that we contracted. We terminated the agreement of the company when we figured out that they were not doing what they were supposed to do. We now got independent people working under us.

We also found out that there was a particular culprit, who is still at large. When marketers took the tags to him, he erased the information on the tags and would write something else. We found this out in June. Immediately, we terminated all the contracts and I directed that the job of erasing and re-writing should be taken away from the people on the field and be vested in the head office.  And immediately this was done, we saw a reduction in the fraudulent act and we moved in with the SSS and started to look for the people involved in the fraud. A few people were arrested and prosecuted.

The major culprit may have got the information and disappeared, but we were able to at least stop the whole racket.

It is obvious that frauds were committed during the tagging process; how much was lost by Nigeria?

From January to December 2012 when we were running manually and from January to December 2013 when it became automated, the reduction in payment was about N26bn. Meaning that this figure was saved during that period. However, I honestly cannot tell you how much has been erroneously paid out. It was in June last year that we disengaged those who were in the field and were involved in some of these unscrupulous conducts. And from June last year, it became very difficult for them to do so. You would really need the support or assistance of an employee of PEF to say that this thing is here. The loophole was probably between March and June. It wasn’t that much; it was a very short period. We had tremendous savings between 2012 and 2013. Unfortunately, I can’t talk of all the money we paid.

What will be the fate of the PEF after the passage of the Petroleum Industry Bill?

To be honest with you, I don’t know. It is difficult to say because an executive bill has been submitted to the National Assembly and they have been looking at it. As a chief executive officer, I think about that. I ask myself, what plan should I have? Should I have the plan of winding down the PEF? Should I have the plan of growing the PEF or should I just keep it as it is? When I look at the workers in the PEF, not because I’m in the PEF, but in all honesty, they are very well trained and their attitude to work is good. Generally speaking, we have developed them aggressively over the last seven years. Even if there is no PEF, these guys can go out there with the skills they have acquired and survive on their own.

However, one thing I know is that whether the PEF stays as an organisation or not, the workers will continue to be valuable people that government wouldn’t want to throw away. This is because they have been well skilled. It will interest you to know that Aquila was written by a worker in the PEF.

When is your tenure expiring?

If you read the Act of the PEF, whether by mistake or for whatever reason, you will discover that there is no tenure specified in it. And that is the truth. That’s why the person that was there before me stayed for 11 years. This is because there is no tenure in the Act that established the PEF. But in the new one that we are now trying to put in the PIB, we have put eight years. However, for now, there is no tenure in the Act that establishes the PEF.

By suggesting eight year tenure for the office of the executive secretary in the new bill, does this not show that the PEF will still remain in the post PIB?

The executive bill indicates that the PEF will remain until such a time that there is no need for it as determined by the minister of Petroleum Resources. I have not seen what the National Assembly is putting forward. They may decide to amend some of the sections.

You seem more focused on closing the door on external moles. What about the internal culprits?

What I have resolved to do is that where we have caught people, we have dealt with them accordingly. Where we don’t have any proof, we shuffle them and put them in areas where we believe they can’t do much damage.

Is this what led to your partnership with the Federal Road Safety Corps?

Towards the end of last year, we found a system that would tag the truck, mark it with a dot metric marker and then we keyed in with the FRSC. This is because the FRSC has a fantastic system that mirrors what we are doing at the PEF.

So how does this collaboration work?

When we came up with this idea, we decided to get a different tag. Although the pressure was so much by the end of last year, we refused to give out the tags. Our new policy is that we will only give the new tags to trucks that are registered with the FRSC. This is because in the FRSC system, once your information is in, it is registered. The FRSC has now given us access to its portal; so from our office, we can put your licence plate number and if you have not registered with the FRSC, you cannot get the tag with us. Aside that, we are now going out to integrate our systems. The challenge has now strengthened our processes.