A report commissioned by members of Nigeria's House of Representatives has found that the country's fuel subsidy programme is allegedly riddled with corruption and has been responsible for the loss of billions of dollars.

The revelations have sparked renewed calls for the government to overhaul the state oil company, the Nigeria National Petroleum Corporation (NNPC), after the panel that launched the probe and produced the report found that it, along with private market actors and the state regulator, owes up to USD6.8 billion in government debts and a further USD3.5 billion to independent oil trading companies, according to Reuters.

An undisclosed percentage of the missing funds was allegedly siphoned off by corrupt officials and departments, who used inflated contracts to embezzle money, according to the report,. The missing USD6.8 billion, which was allegedly siphoned off over a period of three years, is roughly equivalent to one-quarter of the country's annual budget. The parliamentary report was commissioned in the aftermath of the upheaval surrounding the attempted unilateral removal of the fuel subsidy by President Goodluck Jonathan in January 2012, which led to widespread rioting and strikes by national trade unions (seeNigeria: 4 January 2012:).

Significance: The sheer scope of the embezzlement and mismanagement in the fuel subsidy scheme will come as a shock to many, despite entrenched corruption in many sectors of the country. The findings of the parliamentary panel will likely lead to renewed calls to pass the Petroleum Industry Bill (PIB), which continues to languish before the legislature, but could hold the key to concerted oil sector reform. However, any attempt by the executive branch to partially or fully remove the subsidy as part of an effort to clean up the scheme will likely inspire a second round of civil unrest and strikes.

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