NNPC Withholds N764.2bn From Federation Account | Independent Newspapers Limited
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NNPC Withholds N764.2bn From Federation Account

Crude Oil; oil industry, Price
Posted: Jul 12, 2016 at 4:30 am   /   by   /   comments (0)

…Sits On N5trn In Five Years


Isuma Mark

Abuja – The Federation Accounts Allocation Committee’s (FAAC) post-mortem sub-committee has indicted the Nigerian National Petroleum Corporation (NNPC) of gross failure to remit N764.2 billion into the federation account since President Muhammadu Buhari took over on May 29, 2015.

According to a report released weekend, which puts the total debt being owed the federation account at N5 trillion over the last five years (January 2011 and April 2016), NNPC failed to remit N689.1 billion into the federation account from the N1.6 trillion it made from selling 157,889,648 barrel of crude oil.

It only remitted N987.5 billion into the federation covering January and December 2015, the report noted.

It noted that the corporation restarted substantial default in remittance from May 2015.

President Buhari doubles as the minister of petroleum and until recently had Ibe Kachikwu also doubling as the minister of state for petroleum and Group Managing Director of NNPC. Kachikwu currently sits as the chairman of the board of the corporation, while both the president and Kachikwu still retain their positions as ministers in the Ministry of Petroleum Resources.

The FAAC’s report said NNPC was allocated 12, 074,800 barrels of crude in January 2016 at the cost of N112.2 billion. The corporation made a net payment of N85 billion, leaving an outstanding of N27.2 billion.

The same method of incomplete remittance continued in February 2016 when the corporation got 11,321,080 barrels of crude valued at N93.3 billion. It succeeded in making payment of N75.6 billion while holding on to N17.6 billion, the report stated.

Then in March 2016, the report said NNPC got 13,037,358 barrels of crude amounting to N87 billion, noting that only N67 billion was paid leaving N20 billion with the corporation.

In April 2016, NNPC got 11,302,861 barrels of crude amounting to N62.8 billion. It paid N52.5 billion, leaving an outstanding balance of N10.3 billion.

However, the report covering 2011 to 2014 said NNPC failed to remit N844.9 billion of the N2.7 trillion it made from being allocated 170,632,246 barrels of crude oil between January and December 2011. It, however, paid N1.8 trillion into the federation account.

Between January and December 2012, the corporation again failed to pay N1.1 trillion into the federation account out of the N2.5 trillion it made from being allocated 160,173,448 barrels of crude oil. It only paid N1.6 trillion into federation account, it noted.

Between January and December of 2013 and 2014, respectively, NNPC failed to remit N1.1 trillion each into the federation account. In 2013, NNPC got 156,192,175 barrels of crude oil valued at N2.6 trillion and made payment of N1.5 trillion while in 2014 it was allocated crude volume of 158,206,819 barrels worth N2.6 trillion where it paid in N1.4 trillion into the federation account.

Making strong contribution to the reports, a member of the committee said, “Members may also recall that the sub-committee had been carrying forward accounts withheld by the NNPC from domestic crude sales since 2011. The NNPC had explained over time that the outstanding amounts of money include subsidy claims, pipeline maintenance, and pipeline crude and product losses.

“The sub-committee had consistently insisted that the NNPC should provide details of how much claims were expended as necessary condition for it to accept such claims, but the NNPC till date is yet to come up with such details.”

“The NNPC had also insisted that the outcome of the forensic audit on the NNPC would reveal if the corporation owed the federation or vice versa. However, the just-concluded forensic audit covered a period up to December 2010 while the outstanding period covered by the subcommittee is from January 2011 to April 2016”, he added.

This indeed might throw up further controversy as this latest indictment runs contrary to what both the Office of the Auditor-General of the Federation (OAGF) and the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) said in March.

According to the OAGF’s report, NNPC failed to remit N3.2 trillion between 2011 and 2015 while RMAFC few days later put the figure at N3.2 trillion.

Justifying how the figure was arrived at, Mr. Ibrahim Mohammed, RMAFC’s spokesman, had said the figure of N3.2 trillion was from the 2014 annual audit report obtained from the Federation Accounts Allocation Committee’s Technical Sub-Committee on Domestic Crude Oil Sales and Reconciliation Statement as contained in the NNPC’s mandate to the Central Bank of Nigeria (CBN).

Mr. Mohammed had said, “Available records at the commission’s disposal indicate that between January 2011 and December 2015, the total indebtedness of the NNPC to the Federation Account was N4.9 trillion, a figure that included the NNPC’s claims for subsidy on petroleum products, crude and product losses, strategic reserves and pipeline maintenance cost.”

All attempts to speak with Mohammed failed.

Similarly, former governor of the CBN now Emir of Kano, Sanusi Lamido Sanusi, had accused the corporation of failure to remit $49 billion into the federation account. While a joint assessment report involving the then Minister of Finance, Ngozi Okonjo-Iweala; ex-Minister of Petroleum, Diezani Alison-Madueke; the CBN and other stakeholders resolved the debts being owed the federation account to about $10 billion, which the then CBN governor, a participant at the meeting accepted.

Yet, NNPC through its Chief Financial Officer, Isiaka Abdulrazaq, said, “The declaration by the AuGF (Auditor General of the Federation) may have been as a result of a misunderstanding of how revenues from crude oil and gas sales are remitted into the federation account.”

“NNPC wishes to state in strong terms that the AuGF’s declaration is erroneous,” he said, adding that the auditor-general had failed to account for costs including a fuel subsidy, pipeline vandalism and maintenance.

“Consequently, the figure owed to the federation account as at January 2015 Federation Account Allocation Committee (FAAC) meeting report was N326,142,137,205.79 ($1.64 billion) and not the N3.23 trillion alleged by the AuGF,” he said.

He faulted the report for not including NNPC’s claim of N1.374 trillion as at 2009 against the federation.

All the stakeholders in FAAC meeting are familiar with the N326.14 billion and it is already in the public domain since then.

Attempts to speak with Olawunmi Ogunmosunle, the chief press secretary, in the Office of the Auditor-General of the Federation in Abuja, failed as she did not respond to mails sent to her as at the time of filing in this report.