Both chambers of the National Assembly yesterday separately faulted the $1.5 billion loan reportedly secured by the Nigerian National Petroleum Corporation (NNPC) to pay off debt owed international fuel traders.
The lawmakers described the loan as illegal because it was not approved by the National Assembly.
But the NNPC has said it operated within the law in borrowing the $1.5 billion (about N240 billion) from foreign banks to pay its debts to international fuel traders.
Responding to inquiries, Senate spokesman Enyinnaya Abaribe made it clear that the National Assembly did not approve the NNPC loan, adding that "under the law, no government agency can borrow money without the approval of the National Assembly. We have to know if that was done first".
Also reacting, the chairman, Senate Committee on Petroleum (Downstream), Senator Magnus Abe, said there was no record to show that approval was given to the NNPC to borrow the money.
"As at this afternoon, there's no record of the loan deal before us. We are still trying to confirm the loan from NNPC. The committee read about the loan deal on the pages of newspapers like other Nigerians and we have heard concerned Nigerians calling to ask whether the National Assembly approved the loan. We have no record of such before us," he said.
The House of Representatives yesterday also said that the NNPC did not inform it of the contentious $1.5 billion syndicated credit obtained by the state oil coy reportedly to pay off accumulated debts for petrol already supplied by foreign importers.
Reacting on the development to LEADERSHIP on Tuesday, House deputy spokesman Victor Ogene said the matter was being investigated and would be tabled for deliberation at plenary when federal lawmakers resume from their break next week.
"Without being judgemental, these are the reasons the House of Representatives has severally insisted on full disclosure in the conduct of government business, in this case,the Nigerian National Petroleum Corporation (NNPC). Government is not limited to the executive, there is a need for synergy with other arms of government.
"In view of the Medium Term Expenditure Framework (MTEF) adopted by the National Assembly, it is illegal for the NNPC to engage in external borrowings without recourse to the federal legislature.
"While the matter is already being investigated, when the House returns from its break, the NNPC as a matter of urgency has explanations to make. Surely, the relevant committees will brief the House on the matter."
In a monitored report, the $1.5billion syndicated credit obtained by the NNPC was purely a "commercial decision" taken by the corporation to pay off accumulated debts for petrol already supplied by foreign importers and to save Nigeria's credit rating in the international markets.
International news agency, Reuters, which broke the news on the loan deal, said it was struck towards the end of last year.
The loan, provided by several Nigerian and international banks, was brokered by Standard Chartered Bank.
The NNPC pledged 15, 000 barrels of crude per day as collateral with an agreement to pay the loan back in five and a half years.
The NNPC is believed to owe foreign commodity traders over $4 billion for petroleum products supplied over the years.
The National Assembly had December 13, 2012, approved a N161billion supplementary budget requested by President Goodluck Jonathan to settle fuel subsidy payments for the remaining part of the year to ensure steady fuel supply during the yuletide.
We operated within the law - NNPC
However, when contacted yesterday to confirm the borrowing, acting spokesperson of the NNPC, Ms Tumini Green, told our correspondent that "exactly what they said in the report is what it is".
The deal was reportedly struck at the end of 2012 to ease the burden on big commodity and the loan was provided by several Nigerian and international banks which was brokered by Standard Chartered.
Asked if the NNPC was operating at a loss, which had forced it to resort to borrowing to clear its debts, Green said "it's not a matter of operating at a loss, but for various reasons you pay money for something and then you find out that there is a shortfall in other areas.
"It is purely a business deal. If you are in business and you have a debt you have to borrow money to clear the debt. It's just like when you make a budget for something, you can budget, say, N25 million for roads and then something else comes up, you end up spending the money and you look for a way to make up. So, at some point you look for a way to clear your debts and you borrow to clear it up."
Asked if the Corporation got authorisation from the federal government to obtain the loan, since the NNPC was not an autonomous agency, Green said, "What makes you think we didn't get authorisation? We have always worked within the law."
On what the interest rate is, she said "I don't really know; it's a syndicated loan."
According to Reuters report, Standard Chartered, which brokered the deal, will be paid back over five and half years, and the NNPC has put up 15,000 barrels per day of its oil production as collateral.
The NNPC has been the major importer of fuel consumed in the country after most marketers opted out of the importation business following the fuel subsidy scandal, leaving the Corporation to grapple with filling the huge gap in demand and supply.
Meanwhile, section 6(1) of the NNPC Act states that "the Corporation shall have powers to do anything which in its opinion is calculated to facilitate the carrying out of its duties under this Act including, without limiting the generality of the following, the power to enter into contracts or partnerships with any company, firm or person which in the opinion of the Corporation will facilitate the discharge of the said duties under this Act".
Similarly in section 8(1) the Act states that "subject to the other provisions of this section, the Corporation may from time to time borrow by overdraft or otherwise howsoever such sums as it may require in the exercise of its functions under this Act", but stated in 8(2) that "the Corporation shall not, without the approval of the National Council of Ministers, borrow any sum of money whereby the amount in aggregate outstanding on any loan or loans at any time exceeds such amount as is for the time being specified by the National Council of Ministers."