Monday 20 January, 2020

$38-m set aside for forensic audit into massive oil losses at Petrojam

Finance Minister, Dr Nigel Clarke says the audit, will be multi-year.

Finance Minister, Dr Nigel Clarke says the audit, will be multi-year.

The government has set aside $38 million that will go towards the forensic audit that will be undertaken to help determine how approximately 600,000 barrels of oil valued at $5.2 billion went ‘missing’ at the state-owned oil refinery, Petrojam.

The unaccounted-for oil spans both Jamaica Labour Party and People’s National Party administrations, an investigation by Auditor General, Pamela Monroe Ellis found. It spans the period 2013 to 2018.

The $38 million is provided for in the First Supplementary Estimates which were approved by the House of Representatives on Tuesday.

Despite the allocation, it could be some time yet before the country gets to know exactly what happened as Finance Minister, Dr Nigel Clarke, has said the audit, will be multi-year.

“We (the government) believe that some of the problems are of the current era, [some] are long-standing in nature, and the government is using resources to ensure that we can get to the bottom of these problems,” he told the House.

Prime Minister Andrew Holness ordered the forensic audit in December, following a meeting with the Petrojam Board and after the findings of a damning 114-page report from the auditor general into the operations of the oil refinery and its parent company, the Petroleum Corporation of Jamaica.

“We spent three hours discussing the (auditor general’s) report, two of which were on the oil losses,” said Holness at the time.

He added that: “I have come to the conclusion, based upon the meeting and what is in the report, that there needs to be a forensic audit into these losses. And so I’m going to direct the board to once again … - this time for the last time - direct the board to start the process to identify how can we lose 600,000 barrels of oil over five years, and to explain to the public what this is…”

The prime minister said some people would have concluded that the oil is either stolen or missing.

“And as I dig deeper, there could be the possibility of pilferage, and indeed we have had anecdotal cases of pilferage of finished products,” said Holness.

However, he was quick to caution that the losses could also be due to wastage, or of a technical nature.

The PNP has acknowledged that some of the oil went missing while it formed the government but has welcomed the audit.

Get the latest local and international news straight to your mobile phone for free: