Petroleum Corporation (NNPC)are at loggerheads again, this time
over an alleged unremitted $20billion in oil revenues.
This came as ongoing investigations into the alleged $49.8 billion
missing oil revenue took a new twist with the governor of the
Central Bank of Nigeria(CBN), Sanusi Lamido Sanusi, claiming that
the Nigerian National Petroleum Corporation (NNPC) was yet to
remit $20 billion to the Federation Account and not the $10.8 billion
earlier reported.
Sanusi told the Senate panel investigating the unremitted oil revenue
that the accounts of the CBN showed that out of the $67 billion the
NNPC shifted between January 2012 and July 2013, only $47 billion
has been received by the apex bank, leaving $20 unaccounted for.
Meanwhile, the NNPC dismissed the claims, saying that this was not
the first time the CBN Governor had made wild allegations about the
NNPC and had come out to admit his mistake.
The NNPC recalled, that at a press briefing held by the Minister of
Finance and Coordinating Minister of the Economy, the Minister of
Petroleum Resources, the Governor of Central Bank and heads of
DPR and FIRS, the initial figure of $49.8B was reconciled to
$10.8B. It added that on the same
day, at the Senate hearing, the CBN gave a figure of $12B which
was corrected by the Coordinating Minister of the Economy to
$10.8Bn and that yet in yesterday’s presentation the CBN’s figure
changed again to $20B.
It described this as a clear indication of CBN’s inconsistency.
It said the Central Bank’s figures keep changing, describing it as a
worrying trend coming from an agency of government charged with
managing the financial affairs of the country.
“While NNPC and other relevant government agencies are in the
process of reconciling the $10.8B as accepted by all parties, we are
surprised by the new $20B figure introduced by the CBN”, the NNPC
said in a statement. It added that according to CBN the $20B was
made up of $12B subsidy claim, $6B NPDC gross revenue and $2B
third party revenue.
“This indicates that the CBN cherry picks the Figures” it said, adding
that “for example in taking the entire $6B gross revenue accruable
to NPDC and allocating
same to the federation account, CBN simply multiplied the gross
production by the crude oil price; thereby failing to account for the
operating costs (opex) and amortized capital expenditure that
underpin the production. In other words, the CBN failed to take into
account the cost of production.
“We reiterate that NPDC has been remitting the royalty and
petroleum Profit Tax, PPT to the Federation Account. NPDC as a
subsidiary of NNPC operates a business model similar to other
international companies in Nigeria and abroad and will continue to
be governed by these global best practices in the execution of these
assets.
The CBN governor also said the NNPCs claims of payments for
kerosene subsidies were fraudulent since there was still a valid
presidential directive eliminating subsidy payments issued by the
late President Yar’Adua since July 2009.
Giving a breakdown of oil receipts by the CBN, Sanusi said, “NNPC
did a presentation and we have all agreed that $14 billion out of the
$67 billion they shifted came into the dollar account of the
federation. We have looked at the FIRS numbers and we have
confirmed that $16 billion paid by international oil companies to the
FIRS account was the proceeds of crude lifted in the name of
Nigerian Petroleum Development Company (NNPC) but sold on
behalf of FIRS. The FIRS has confirmed this money and Central
Bank has accepted.”
He further said there was a $1.6 billion that DPR also received from
IOCs, which was part of that crude, which the CBN has accepted.
“We
have
provided
evidence
that
in
the
naira
crude,
out
of
the
$28
billion domestic
crude
shipped
by NNPC, it has repatriated $16 billion. We have also established
and I think there’s no disagreement here that NNPC
shipped $67 billion worth of crude. But only $47 billion has come
back to the federation. There is a $20 billion that has not come
back, so burden of proof is on NNPC,” he added.
At the public hearing, Sanusi also queried NNPC explanations that
some of the unremitted funds of up to $6 billion belonged to the
NPDC and not the federation account.
In his presentation, Sanusi told the audience that the CBN has
evidence negating these assertions, as he insisted that the
corporation was actually paying to NPDC what belonged to the
federation account.
“We have made suggestions that we question some of those
explanations and we believe that some of that which has gone to
NPDC does not belong to the NPDC but the federation account,” he
said, adding that the apex bank’s position was that some of the
crude shipped by NPDC was shipped from oil wells that belong to
the federation, and as such the proceeds should not all go to the
company.
“I have given three legal opinions to this committee on
the unconstitutionality and illegality of that transaction,” the
governor stated.
On NNPC claims that it had used some of the alleged missing funds
to pay for kerosene subsidies, Sanusi said it was worrisome that
from April 2012 till date, NNPC has submitted returns consistently
before FAAC, showing
that it has not deducted monies for subsidies for PMS, and that it
was
therefore surprising that having submitted nil returns since April
2012,“the corporation is now claiming that deductions were being
made”.
Speaking further, he noted also that NNPC had explained that 80
percent of the money that had not been repatriated came on
kerosene and fuel subsidy.
“I have submitted to this committee written evidence of a
presidential directive eliminating kerosene subsidies since 2009.
And NNPC still needs to provide authority for buying kerosene at
N150 and selling at N40 and inflicting that loss on the federation,”
he said.
Sanusi said it was not yet clear whether the said payments for
kerosene subsidies were made, or whether PPRA has approved
them, but that it would be interesting to see what the reconciliation
committee finds at the end of the exercise.
“The other point about third-party financing and operating expenses
which were not appropriated, we have not seen any documentation
or proof,” he explained.
For its part, the NNPC said in its statement that “Regarding the
subsidy claim on kerosene, it is important to note that NNPC as the
supplier of last resort is the only company supplying this product in
Nigeria for the benefit of the citizenry. If kerosene has been
deregulated why are the
independent marketers not supplying this product in line with what
is applicable to diesel (AGO). NNPC owes a duty to Nigerians to
ensure that there are adequate products in the country. This
mandate has without question been accomplished in the past four
years.
NNPC deserve to be commended rather than battered, for ensuring
adequate supply of kerosene at regulated price of N50.00k. NNPC
cannot be held responsible for any differential pricing from non
NNPC retailers. This is the basis for NNPC’s claim on kerosene
subsidy.
Earlier, Bright Okogu, director general, Budget Office, told the public
hearing that the involved parties had gone quite far with
reconciliations of the NNPC revenue in order to unravel the actual
missing money, assuring that the reconciliation process would be
concluded by next week.
Makarfi, who chaired the event, warned that all concerned parties
must provide written submissions before the next public hearing,
while urging them to present themselves for their testimonies.
Also, Olusola Saraki, former Kwara State governor and a member of
the committee, queried why it had taken so long for the
reconciliation to be completed since the issue got to the public
domain in December.
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