NCJ Number
189265
Journal
Journal of Financial Crime Volume: 8 Issue: 3 Dated: February 2001 Pages: 276-284
Date Published
February 2001
Length
9 pages
Annotation
The distribution and marketing of petroleum products in Nigeria has led to problems that are a major source of concern and embarrassment to the government.
Abstract
Energy is the vehicle for economic development and the policy of the Nigerian government is that petroleum should be tapped, developed, and optimally distributed for the overall development of society. The production, ownership, and distribution of petroleum products are the exclusive preserve of the Nigeria National Petroleum Corporation (NNPC) for and on behalf of the Federal government which enters into production-sharing contracts and joint production ventures with contractors, such as the multinational oil and exploration and prospecting companies. Corruption has contributed to the high cost of operations, enormous cost of repairs, unnecessary purchases, overstocking, and payment for items not supplied. There are stiff legal penalties that are rarely enforced, especially for the commission of economic crimes of sabotaging distribution. Proposals for reform include deployment of the many honest personnel at the tactical and strategic levels; construction of more deposits and reservoirs for storage at strategic places; construction of fuel pipelines to link various parts of Nigeria; and use of the provisions of the Petroleum Equalization Funds Regulation. This regulation allows compensation and reimbursement to oil companies and enables independent marketers to recoup expenses and losses incurred in the sale or marketing of petroleum products at uniform prices. And, since the oil sector is vital to the Nigerian economy and to the international energy business, tax incentives should be given to investors. 90 references.