22 March 2016

Nigeria: Petroleum Corporation Failed to Remit N4.9 Trillion to Federation Account

Photo: Vanguard
(file photo)

Amid the denial by the Nigerian National Petroleum Corporation (NNPC) of the allegation by the Auditor- General of the Federation ( AuGF), Mr. Samuel Ukura, that it didn't remit into the Federation Account N3.25 trillion crude oil minerals revenue, the Revenue Mobilisation, Allocation and Fiscal Commission ( RMFAC) has said the amount quoted by the AuGF was under-reported.

According to the commission, the amount standing to the NNPC as un-remitted liability is indeed N4.9 trillion, explaining that the N3.25 trillion only represents the corporation's liability in 2014. Before then it said NNPC had a pending liability which if aggregated would make it N4.9 trillion.

This new allegation is contained in a statement yesterday by the commission's Head of Public Relations, Mr. Ibrahim Mohammed.

The Fiscal Commission is charged with the mandate of mobilising nationwide revenue generation for purposes of equitable distribution at the Federation Account among the three tiers of government as well as the fixing of political and judicial officers' pay and emoluments.

It's statement yesterday read : " Following the Auditor General's report that the 'NNPC did not remit N3.2tr' in 2014, the Revenue Mobilisation Allocation and Fiscal Commission has confirmed that the sum of N4.9tr was yet to be remitted into the Federation Account by the Nigerian National Petroleum Corporation, (NNPC).

"RMAFC observed that the figure of N3.2 Trillion was from the 2014 Annual Audit Report obtained from the records of the FAAC Technical Sub-Committee on Domestic Crude Oil Sales and reconciliation statement as contained in the NNPC's mandate to Central Bank of Nigeria (CBN)

"But available records at the commission's disposal indicate that between January 2011 and December, 2015, the total indebtedness of NNPC to the Federation Account was N4.9 trillion, a figure that included NNPC's claims for subsidy on petroleum products, crude and product losses, strategic reserves and the pipeline maintenance cost."

The statement adds that while the Auditor General's Report claimed that NNPC owed the sum of N3.2 trillion to the Federation Account in 2014 from Domestic crude sale, the commission's records revealed that the corporation owed the Federation Account the sum of N1.99 trillion only in 2014 from domestic crude sales. Therefore, the figure quoted by the Auditor-General of the Federation must have included revenues from other sources.

It continued : " With regard to the alleged payment of US$235 million realised from the sale of natural gas into an undisclosed escrow account by the NNPC, the commission explained that the NNPC on behalf of the NLNG had entered into agreements with three (3) International Oil Companies (IOCs) i.e. Nigeria Agip Oil Company (NAOC), Shell Petroleum Development Company of Nigeria (SPDC), Total E&P Nigeria Limited (TEPNG) under a Modified Carry Agreement (MCA) proceeds from which are deposited in escrow accounts for funding the various gas projects under the LNNG.

The total amount transferred to the various accounts from 2012 to November 2015 was $1.615 billion. The commission, through the FAAC Post Mortem, has consistently requested the NNPC to provide it with updated financial statements on the projects but NNPC was yet to respond."

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