This is the continuation of the story published last  Monday, August 27, 2012

The Executive Secretary of the Petroleum Equalisation Fund
(PEF), Mrs Adefunke Kasali in this interview
with our correspondent  gives an
insight into the operation of the PEF. Excerpts:

Once that is done, the information immediately and
automatically to the server in our head office and when they scan the entire
document into the server and attach it here, our processing department
processes it and from there it goes electronically to audit and all the
verifiers and approval levels and straight into our e-payment system. It is the
first fully end-to-end operations and payment solutions anywhere in the
country.

Question:Is the equipment fool-proof and how do you deal
with the human factor?

Answer:The design is done to have little human interference.
Our depot representative at the loading facility may have to click on some
issues, which have been preset, so that he just picks.

Once a marketer is registered on our database and he comes
into our office to do some transactions, all the depot representatives have to
do is to just pick that information. The truck would have been registered and
that information is sitting on the server and all in all the devices. It’s not
subject to a lot of human manipulation and that is the beauty of it.

Question: What are you doing to ensure that all depots are
captured in the project?

Answer: Our plan is that it will be 100 per cent deployed.
Now we have achieved just 60 per cent of the depots that are Aquila-ready. We
are in the process of deploying to the other depots and it’s really proper that
we follow up on all the procurement processes that have sort of delayed us.

Yesterday, one of the MDs of the facilities called me and
asked when are you bringing Aquila because all his marketers are saying with
Aquila they can get their money more quickly because nobody wants to buy from a
facility where they are not PEF Aquila-ready.

We are working very hard to ensure that in the shortest
possible time, we have all the depots in the country that are doing petroleum
transaction on Aquila so that they can all enjoy the benefits of what
government is doing.

I can be specific that by end of November, we should have
all the depots ready because the last bit of the procurement processes is that
we should be having all the equipment in Abuja in for deployment by the end of
September.

In the new Petroleum Industry Bill (PIB) what are the
assigned roles for PEF? The PIB as I have seen the PEF is still very much part
of the PIB that has been submitted by the executive to the legislative arm of
government. The roles will be clearer but basically, the mandate of the board
is still very much maintained by the PIB.

Question: The House of Representatives Committee on Public
Accounts ordered the management of PEF to refund N27 billion into the Federal
Government coffers within three months being 80 per cent of the operating
surpluses of the agency in the last five years. How far have you gone in this regard?

Answer: It is true that the House of Representatives Public
accounts invited the Board for a review of the 2009 accounts of the Board and
at that meeting, directed that the board should refund some money to the
federation account.

At that meeting, management tried to clarify the issues to
the members of the committee and I hope we still have an opportunity to discuss
the matter further.

PEF uses cash basis of accounting and so because the feeling
is that as a Fund, we should recognise what comes in and what goes out and that
is basically what cash basis accounting says.

Cash basis of accounting does not recognise receipts and
receivables that you are expecting and it basically does not recognise payables
that you haven’t been able to process and pay.

The starter of our payables as at the time these audited
accounts were submitted was not taken into recognition, so asking the board to
pay back money at that time doesn’t necessarily take into the account if the
money is still there. Because when you are looking back at an account, you do
not even know what that situation is a few years down the road. Needless to
say, the board has been given 90 days to do that.

Question: When an agency is asked to refund, the conclusion
is that some fraudulent practices must have taken place. Could you use the
occasion of this forum to set the records straight?

Answer: Certainly there was no untoward act, no corrupt act.
What the committee did was that if the board had receipts in the year at the
beginning or throughout the year and then the board then paid some monies out,
whatever was outstanding was considered surplus income. And that meant, for
instance, if one billion was outstanding that was not paid out, the committee
did not take into view that there could be 10 billion worth of claims waiting
to be paid at the end of the year.

Basically, they didn’t find very much that was wrong with
the account of the board except what they called surpluses and they then took
the position that those surpluses are supposed to be refunded to the federation
account and then supposed to be gotten out.

But the fund does not get money from the federation account
to pay its claims. So, if the money is returned into the federation account,
then the board will have an issue as to where the funding to pay the claims
when they are processed.

Question: Is this the same thing with the N20 million scam
on land? The committee also directed the board to refund another N20.22 million
within the same period for expenses incurred on a plot of land acquired in 2001
for its corporate head office but which was revoked by the Federal Capital
Development Authority, FCDA in 2006?

Answer:The other issue that was raised by the committee was
that in 2003 which predates my coming into the office, the FCT had allocated a
piece of land to the PEF for the purposes of developing its corporate
headquarters.

The files available to me actually indicate that the board
has prepared all the drawing and everything. It also forwarded all those things
to the appropriate department in the FCT for granting of a building plan
approval.

But before that could be done, the exercise that took place
around that time, the land was revoked and government took it back. I know that
when I came in 2007 as the executive secretary and I met that situation, I made
several attempts. In fact, I spoke to two past ministers of the FCTs and made
several vigorous attempts for us to get the land back and to develop the head
office.

But the House Committee has now taken the decision that
since the board had expended some of that money [20 million naira]… [cuts in]
and to the best of my knowledge a large chunk of that money was spent on
payment of license fee to the FCT, engineering design and drawing… the board
paid back and the N20 million into government coffers.

Question:How can the nation eradicate the issue of fuel
scarcity especially with the recent strikes by NUPENG, DAPPMA and JEPFON over
nonpayment of subsidy claims?

Answer: The issue of fuel scarcity is an issue of supply and
I think the focus that government has to rehabilitate and get our refineries up
and running efficiently is really the long term solution.

I know that there is a lot of work being done on getting the
refineries back, and the Turnaround Maintenance (TAM). The Honourable Minister
of Petroleum Resources had mentioned that contract for the TAM had been awarded
to the original builders of the refineries so that we can get the expertise
that went into building them the first place.

That is the long term solution when we have our refineries
working to meet our local demand then, the issue of distribution is easier.

Question: How can we ensure that petroleum products are not
diverted to neighbouring countries as it is commonly practised?

Answer:The issue like I said, is that of supply which is
ensuring that as much as possible we are refining what we produce in crude.
Also one of the benefits of Aquila is a truck that is headed for a particular
location cannot deliver to another location.

For instance, several marketers have said we are moving this
product to Suleja and it never arrives. Then they take it to another location.
When it gets in there and once our depot representative can’t even find it on
the server even if they try to receive that product through another means, it
won’t go.

So those are the things we are doing now to curb diversion.
Therefore, Aquila will curb a lot of that. Phase one of Aquila is depot to
depot, phase two is to ensure that when it leaves the receiving depot it ends
up in the retail outlet that it’s meant to go.

With this project over time, cases of diversion will be
really severely cut if not totally eliminated.

Question: How will the PIB affect operations in the oil and
gas industry?

Answer: I believe that the review of the laws and the
transformation plans will just help Nigeria. I believe that it will be good for
Nigeria.

As far as PEF is concerned as I said earlier, we have the
bill that has been presented to the National Assembly and our commitment to
Nigeria is that we will do whatever we need to do and work very hard to ensure
that the benefits that government had in mind in putting together PEF are
delivered to Nigerian public.

This is by way of our products being available in the retail
outlet s and also by way of cutting people who are exploiting the situation
that causes the products not being sold at the appropriate prices.