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Nigeria: NNPC Nets $77.031 Billion in Three Yrs
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Vanguard (Lagos)
23 July 2008
Posted to the web 23 July 2008
Leon Usigbe
Lagos
THE Nigerian National Petroleum Corporation (NNPC) said, yesterday, it made a total revenue of $77.031billion and N3.930 trillion between January 2003 and March 2008 and remitted to the Federation Account a total of $56.221 billion and N 3.930 trillion within the same period.
The corporation also said it was paying about $6 million a month protection fee to militants to protect some of its pipelines in the Niger Delta area instead of the $30 million they originally demanded.
According to the Acting Group Managing Director, Engr. Abubakar Lawal Yar'Adua, who spoke yesterday before the House of Representatives Committee on Finance investigating remittances into the Federation Accounts by Ministries, Departments and Agencies (MDAs), about $20.11 billion was also paid as cash calls on Joint Venture projects.
The NNPC submission to the committee showed that within the period under review, it recorded a total of $4,754,684,156.78 from 47,853,785 barrels of crude oil sold, $637,135,273.85 from government domestic gas sales and $4,511,324,070.03 as revenue accruing to government on NNPC's crude take for domestic consumption.
Engr. Yar'Adua blamed the discrepancies in the prizing of diesel between the NNPC and the marketers on the last administration which he said instituted two contradictory regulatory laws which on the one hand allowed independent marketers to import the product and sell at any price they wished while on the other hand disallowing the NNPC to increase its supply price.
"They said everybody can import AGO and sell at any price. At the same time they regulated the NNPC to be selling at a fixed price. So, there was confusion. NNPC sold at depot price of N61.15 but people who have tankers, when they go to Europe, when they buy it, in Nigeria the landing price is N143 and therefore they have to make profit.
"They were given 80% of what NNPC either import or produced. When we came on board, they imported this thing at N143 and the hope of government then was if they get 80% of whatever Nigeria produced, it would cushion whatever they have and they can sell at reasonable price.
"But as human beings, nobody sells at that reasonable price. All these people are business people and they are busy. They take the NNPC's own and put in their own tank, import their own and sell at the maximum price," he said.
The NNPC boss informed the committee that lack of government subsidy to the corporation was threatening its existence since it buys its crude at the international market and was not allowed to increase its price.
"From 2003 to 2005, NNPC was not given any subsidy and you are aware that the crude price kept going up and government has maintained the same prices on products. Therefore, NNPC is subsidising the whole country.
"We are able to get subsidy on PMS up till today but unfortunately we have AGO crisis. NNPC is still selling AGO at N61.15 whereas in the market, everybody knows N160 and N170 or even N200, I was made to understand.
So, NNPC is losing money. We cannot raise our own prices because it is a government thing but we are buying the crude at international price. So, consequently, it may appear that very soon, NNPC may collapse because we are subsidising," he said.
Engr. Yar'Adua noted that the corporation was discussing with Labour to see how the prices could be raised and trying to convince government to give subsidy on AGO especially as it high price was causing factories to close down.
The NNPC boss who explained the increase in cash calls for Joint Venture projects said apart from the increase in cost of drilling equipment, the threat posed by militants to oil installations had ensured a rise in insurance cost for such equipment, adding that NNPC was forced to pay $6 million monthly to militants who threatened to "deal" with corporation.
He said: "When I was repairing the Chanomi Creek pipeline, I called the boys; the contractors paid the N12 million per month to supervise the lines. By the time we finished the thing, they told me they wanted $30 million per month.
Meanwhile, Chairman of the House Committee on Finance, Mr John Eno, revealed that the committee had reviewed about 60 per cent of the submissions from MDAs from which it discovered that the MDAs generated N3.6 trillion since 1999 of which N1.5 trillion was not remitted into the Federation Account.
He said the N3.6 trillion was outside the revenue generated by NNPC and tax collected by Federal Internal Revenue Service (FIRS).
NNPC probe begins
Meanwhile, the ad-hoc committee set up by the House to probe the activities of the NNPC and its subsidiaries will begin work today.
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According to the chairman, Mr Igo Aguma, who briefed the press yesterday in Abuja, all former Ministers of Petroleum Resources and special advisers including former President Olusugun Obasanjo would be expected to appear physically.
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