Unremitted N3.2tn: Reps Summon NNPC, CBN, Others to give account

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The Group Managing Director of the Nigerian National Petroleum Corporation, Mallam Mele Kyari, and the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, have been summoned by the House of Representatives over non-remittance of N3.24tn revenue incurring from sales of crude oil in 2014.

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The summon was issued by the Chairman of the House Committee on Public Accounts, Hon. Wole Oke, based on audit queries issued by the Office of the Auditor General for the Federation for the period in question.

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In its report for 2014, the OAuGF said from the examination of NNPC mandates to the CBN on Domestic Crude Oil Sales and Reconciliation in the Statement of Technical Committee of the Federation Account Allocation Committee meeting held in January 2014, it showed that “a total sum of N3,234,577,666,791.35 was not remitted to the Federation Account by NNPC within the period under review.”

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The query further read, “Cost estimated for crude and product losses was N55,964,682,158.99, which is about 50 per cent of pipeline management cost of N110,402,541,010.88. Names of contractors, location and amount paid to each of the pipeline maintenance were not sighted for audit verification.

“Over 31 per cent – N826,506,271,231.26 – divided by N2,636,390,514,777.18 multiply by 100 per cent – of the realised crude sales for the year were earmarked as other expenses, apart from direct cost of production stated in NNPC reports for the year 2014. The breakdown of other expenses was not provided for audit.

“From the above analysis, it means that the Federation Account is losing 31 per cent (N826,506,271,231.26) being additional estimated cost from the total amount that should have accrued to Federation Account.”

The OAuGFadded, “From the total revenue of N3,234,577,666,791.35 as at 14th January, 2015, payable to the Federation Account by NNPC during the year, the corporation deducted the sum of N826,506,271,231.26, i.e. N660,139,048,061.39, N55,964,682,158.99 and N110,402,541,010.88, for subsidy estimate, crude and product losses and pipeline management cost, respectively, at source thereby resulting to net amount withheld figure of N2,408,041,395,560.33 shown in the above table to the Federation Account.

“All these deductions at source by NNPC were not approved by FAAC.”

The OAuGF, therefore, requested the Accountant General of the Federation to inform the NNPC’s GMD to explain the flagrant withholding of domestic crude oil sales revenue by the corporation.

According to the auditor-general, there has been no positive response on similar issues raised in 2012.

“The accountant-general consequently asked the GMD of NNPC to ‘provide names of the contractors, location, amount paid, to each for the pipeline maintenance for verification, and the process being used by PPPRA for the repayment of subsidy to the oil marketers should be used for NNPC instead of the latter deducting the subsidy at source.”

The OAuGF also declared that deduction at source by NNPC “must stop henceforth as this is a contravention of Section 162(1) of the 1999 Constitution, which stipulates that ‘all revenue proceeds should be paid to the Federation Account.”

The Committee is also asking the NNPC Group Managing Director to respond to other audit queries including: total sum of N248,268,291,460.87 subsidy not budgeted for in the 2014 Appropriation Act; N199,705,152,175.52 un-reconciled items in the domestic excess crude oil account since 2012 to 2014; N392, 261,423,894.77 variance in the proceeds made on crude oil which was almost eroded by JVC operational cost to the extent of realizing 11.51%, 20.21% and 15.35% in the month of January, July and September, 2014, which did not reflect prudence as a profit.

The Committee also invited the CBN Governor to give account on the N9, 923,015,028 collected for Solid Minerals for the year ended 31st December, 2014.

The House committee is also investigating the whooping sum of $510,020,921.79 delayed payment for the crude oil lifted some days later than the due dates required for payments, by Republic of Zambia, Aridor Oil and Gas Ltd, Calson (Bermuda) Ltd, Hyde Energy Ltd, Azenith Energy Resources Ltd and Duke Oil Company.

The AuGF report also showed that some customers had shortfalls in their payments amounting to $6,203,863.68, while another audit query showed outstanding payments by some customers worth $80,452,746.83 of crude oil lifted by Televaras Group, Duke Oil Company and Mezcor Ltd.

The oAuGF is also querying the transfer to Escrow Accounts to the tune of $235,685,861.31 sales profit on gas; and “unexplainable shortfalls of $18,389,334.23” in 2014; $346,211,227.59 on gas export sales due to the Federation Account; $2,664,047.64 exchange loss on gas sales; $9,389,105.80 gas sales without details of payment and $11,973,823.48 disparities in billing unit prices of some customers.

Having reviewed the response of the Accountant-General, Oke and members of the panel insisted on the imperative for the NNPC and CBN CEOs to appear in persons to give account, as the Accountant-General could not provide sufficient evidence on the audit query of such magnitude.

  • Tags: CBN, NNPC, House of Reps

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