31 January 2013

Nigeria: NNPC Owes FG N1.3 Trillion, Says NEITI - To Probe Sharp Rise in Fuel Subsidy Bill

Photo: Vanguard
Nigerian National Petroleum Corporation cartoon.

The Nigerian National Petroleum Corporation, NNPC, is owing the Federal Government about N1.3 trillion ($8.3 billion) in earnings from 2009-2011, according to a report by the Nigerian Extractive Industry Transparency Initiative.

NEITI also stated that it will probe the NNPC's fuel import subsidy bill, which the audit showed rose from N198 billion in 2009 to N786 billion naira in 2011.

The NEITI audit showed that the NNPC is owing N759.88 billion ($4.84 billion) in dividends and loan repayments from the Nigerian Liquefied Natural Gas (NLNG) export business between 2009-2011 and a further N626.43 billion ($3.99 billion) in NLNG funds from previous years going back to 1999.

The audit further revealed that the NNPC receives 445,000 barrel per day of crude oil to refine locally but only uses 20 per cent of it because Nigerian refineries are in disrepair. The rest it sells.

NEITI also noted that the NNPC then removes subsidy from the money it earns from the crude oil sales before sending the balance to government accounts, a practise the auditor said the government should change because it left "gaps in the process".

The audit said Nigeria was owed around $5.85 billion in underpaid taxes and royalties from oil and gas producers but did not name specific companies.

The audit added said some firms were seeking legal action on the alleged debts.

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