Auditor says N663.89b missing in NNPC remittance to Federal Account
By Jeph Ajobaju, Chief Copy Editor
About 107,239,436 barrels of crude oil for domestic consumption in 2019 were not accounted for by the Nigerian National Petroleum Corporation (NNPC) now NNPC Limited, according to the report of the Auditor General for the Federation (AuGF).
About 22,929.84 litres of petrol worth N7.06 billion pumped to two depots (Ibadan-Ilorin and Aba-Enugu) between June and July 2019 were not received by them.
AuGF Adolphus Aghughu also discovered in the NNPC, among other findings, that there is a discrepancy of N663.89 billion it claimed to have remitted to the Federation Account.
He said he issued NNPC Group Managing Director Mele Kyari an audit query to explain missing monies and oil barrels but Kyari refused to answer the query.
The disclosures are part of six audit queries from Aghughu contained in the Federal Government Consolidated Financial Statements for the year ended 31 December 2019.
President Muhammadu Buhari is also Petroleum Minister, a post he has kept since he won Aso Rock in 2015 (so as to approve oil blocs, the juicy ones mostly for Northerners, who own 95 per cent of the most lucrative oil blocs in the Deep South).
The audit report was submitted to the Clerk of the National Assembly (NASS) via a letter dated 18 August 2021 signed by Aghughu.
The report said:
There were discrepancies between the amount reported by the NNPC as transfer to the Federation Account and what was reported by the federal Accountant General.
NNPC records showed it transferred N1,272,606,864,000 but the amount recorded by the Accountant General was N608,710,292,773.44 – a discrepancy of N663,896,567,227.58.
NNPC Group Managing Director Mele Kyari should be asked to explain the discrepancy between the two figures and remit the balance N663,896,567,227.58 to the Federation Account or face sanction.
A sum of N519,922,433,918.46 was transferred to the Federation Account by the NNPC based on transfer mandates.
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NNPC fails to respond to audit query
The report by the AuGF also said:
The NNPC should provide “reconciliation statement for the difference of N88,787,862,853.96 between AGF’s figure of N608,710,296,772.42 and NNPC’s figure per transfer mandate of N519,922,433,918.46.”
“Audit observed that 107,239,436.00 barrels of crude oil were lifted as domestic crude, while allocation of crude oil to refineries for a billing date of January 9 to May 29, 2019 was 2,764,267.00 bbls valued at N55,891,009,960.63.
“Information on Sale of Un-Utilised Crude oil by Refineries for 2019 was not provided, and information on crude oil allocations from 30th May 30 to December 31, 2019 was not provided for scrutiny.”
The management of the NNPC failed to respond to the audit query, according to the report, published by The Nation.
There was possible diversion of domestic crude, diversion of sale of unutilised crude as well as possible loss of Federation Account revenue.
Kyari to provide complete crude oil allocation
“[Kyari] is requested to provide the complete schedule of allocation of Crude Oil to Refineries from 1st January to 31st December, 2019, Furnish details of sale of un-utilised crude oil and reconcile it with total domestic crude oil of 107,239,436.00 bbls lifted in 2019 and remit amount realised from sale of un-utilized crude oil to the Federation Account.”
Section 162(1) of the Constitution says: “The Federation shall maintain a special account to be called ‘the Federation Account’ into which shall be paid all revenues collected by the Government of the Federation, except the proceeds of the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department charged with the responsibility of Foreign Affairs and the residents of the Federal Capital Territory, Abuja.”
In spite of these provisions, the NNPC spent $6.410 million (N1.955 trillion at N305/$1) to fund Joint Venture Cash Calls (JVCC) and other upstream projects such as Gas Infrastructure Development, Brass LNG, Crude Oil PreExport Inspection Agency Expenses, Frontier Exploration Services, EGTL Operating Expenses and NESS Fee and another N55.157 billion on Pipeline Security and Maintenance without first paying the money into to the Federation Account.
Kyari should justify non-adherence to the transfer of all federation revenue to the Federation Account as provided by the Constitution and ensure all revenue is paid into the Federation Account going forward.
“The Audit examination on ‘Schedule of Inflow of Revenue’ by NNPC to Federation Account obtained from the Office of the Accountant General of the Federation revealed that the Domestic Gas Receipts of N4.572 billion was transferred to Federal Inland Revenue Service (FIRS) Petroleum Profit Tax (PPT)-Gas in the month of January 2019, and was not made in the subsequent months of the year.
“This transfer reduced the amount due to Federation Account for the month of January, 2019 to the tune of N4.572 billion” leading to possible “reduction of distributable revenue in the Federation Account, misapplication of fund and diversion of revenue.”
About 22,929.84 litres of petrol valued N7,056,137,180.00 pumped to two depots in 2019 were not received by the depots. No reason was advanced by the NNPC for the non-receipt of the products. The value of the products should be remitted to the Federation Account.
A total 239,800 bbls of crude oil valued at N5.498 billion was received in Warri and Kaduna refineries between January and December 2019 with the source of the crude not validated due to absence of source documents, while money was allegedly classified as crude oil losses without duly completed form 146 to be processed for further investigation.