Nigeria fuel subsidy report 'reveals $6bn fraud'

Protest against removal of fuel subsidy in Lagos, Nigeria - 9 January 2012 Nigerians see cheap fuel as the only benefit they get from their country's oil wealth

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Nigeria's parliament has discussed a report said to reveal that $6bn (£4bn) has been defrauded from the fuel subsidy fund in the past two years.

The debate, which was televised live, made official findings that have been widely leaked in recent days.

The fuel sector probe was set up in the wake of angry nationwide protests in January after the government tried to remove a fuel subsidy.

Nigeria is a major oil producer but has to import most of its fuel.

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"We are fighting against entrenched interests whose infectious greed has decimated our people," House of Representatives Speaker Aminu Waziri Tambuwal said as he opened the two-day debate.

"Therefore, be mindful they will fight back and they normally do fight dirty."

The 205-page parliamentary report uncovers a long list of alleged wrongdoings involving oil retailers, Nigeria's Oil Management Company and the state Nigeria National Petroleum Corporation.

According to the leaks, a total of 15 fuel importers collected more than $300m two years ago without importing any fuel, while more than 100 oil marketers collected the same amount of money on several occasions.

The leaked report also says that officials in the government of President Goodluck Jonathan were among those who benefited from the subsidy fund.

Many of the people named in the document have denied any involvement in fraud, with some taking out full-page adverts proclaiming their innocence in local newspapers.

The BBC's Bashir Sa'ad Abdullahi in Abuja says at least some of the findings are likely to be adopted by Nigeria's lawmakers because of the huge public anger over the attempt to withdraw the subsidy.

Many Nigerians were livid when they were told by their government that the fuel subsidy was economically unsustainable - only to now find out the scale of fraud in the operation of the fund, our correspondent says.

Despite being a major oil producer, Nigeria has not invested in the infrastructure needed to produce refined fuel, so has to import much of its petrol.

The annual $8bn subsidy means prices are lower than in neighbouring countries - and correspondents say many Nigerians see cheap fuel as the only benefit they get from their country's oil wealth, much of which is pocketed by corrupt officials.

After a week of street protests and a general strike, the government agreed to restore some of the subsidy - and reduce the pump price of petrol to 97 naira (about $0.60) per litre after it had doubled to 140 naira when the subsidy was removed without warning on 1 January.

But President Jonathan defended the subsidy cut, saying Nigeria must either "deregulate and survive economically, or we continue with a subsidy regime that will continue to undermine our economy."

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