The Nigerian National Petroleum Corporation (NNPC) has faulted the report of the Auditor-general of the Federation (AGF) which claimed that the corporation owes the federation account N3.2 trillion in unremitted revenues, saying its balance to the Federation Account is N326 billion.
The Corporation, in a statement in Abuja by its Group Executive Director, Finance and Accounts Isiaka Abdulrazaq, noted that the AGF failed to consider other costs associated with the operations of the NNPC in the report, stressing that NNPC owes the Federation Accounts Allocation Committee (FAAC) N326 billion and not the N3.32 trillion reported by the auditor general.
According to him, as part of its responsibilities, NNPC is allocated 445,000 barrels per day for processing into petroleum products, for distribution to the nation, while any unprocessed crude is sold and the proceeds used to pay for importation of petroleum products.
“The proceeds from the sale of these products are remitted to the federation account after deducting the cost associated with the supply and distribution,” he said, noting that these costs include subsidy claims on petroleum products, crude oil and petroleum product losses, petroleum product strategic holding cost and pipeline repairs and maintenance.
“As a major supplier of petroleum products to the nation, NNPC is entitled to claims on subsidy from petroleum products sold at government regulated price, whether imported or locally refined. The process and determination of appropriate subsidy claim is managed by the Petroleum Products Pricing Regulatory Agency (PPPRA) which ultimately issues certificates, which are netted out of domestic crude cost.
“The total amount of subsidy approved and certified by PPPRA for the period of January 2012 to December 2014 was N2.34 trillion. An additional N7.96 billion subsidy claim is still under reconciliation. Losses from crude oil and petroleum products as a result of vandalism on its network of pipelines for the period of January 2012 to December 2014 were N202.68 billion.”
The statement added that petroleum product strategic holding cost and pipeline repairs and maintenance cost for the period of January 2012 to December 2014 amounted to N358.88 billion.
The statement maintained that the figure owed to the federation account as at January 2015 FAAC meeting was N326,142,137,205.79, which is still being reconciled, and not the N3.23 trillion alleged by the AGF, added that the report does not include NNPC’s claim, as at 2009, of N1,374,856,321,401.00 against the federation.
“All the stakeholders in FAAC meetings are familiar with the N326.14 billion and it is already in public domain since then to date. With regard to the N1.374 trillion claims against the federation, this is currently being re-viewed by Federal Ministry of Finance (FMF)-appointed forensic auditors at the instance of the Minister of Finance,” it added.
Abdulrazaq further noted that “the AGF failed to reflect all the figures as they should be, not minding the fact that there is a clear process in conducting FAAC meetings where all federation revenues are presented, discussed and approved. There are series of meetings before and after FAAC meetings to reconcile and resolve any issue as the need may arise,” he said.
On the $235 million allegedly transferred to undisclosed escrow account, the statement noted that the NNPC does not have any secret escrow accounts, saying the alleged $235 million represents proceeds from the sale of gas feed stock to Nigerian Liquefied Natural Gas Limited (NLNG) that was used to repay part of the Modified Carry Agreement (MCA) loans, applicable royalty to the Department of Petroleum Resources (DPR) and tax to the Federal Inland Revenue Service (FIRS).
NNPC explained that “the MCA loan was contracted specifically to fund the development of upstream oil and gas projects whose transactions are regularly reported to FAAC as part of the reconciliation of the revenues to NNPC, FIRS and DPR,” it said, adding that the MCA and all other alternative funding arrangements are annually appropriated by the National Assembly and are fully disclosed to FAAC on monthly basis.
-Leadership