The Nigerian National Petroleum Company Limited (NNPCL) and 13 other agencies allegedly failed to remit $9.85 billion in revenue to the federation account in one year, the Nigeria Extractive Industries Transparency Initiative (NEITI) said yesterday.
NEITI, in a 2021 Oil and Gas Industry Report, which audited the activities of 69 companies and the Nigeria Liquefied Natural Gas (NLNG), 13 government entities and one state-owned enterprise, NNPC, said the unremitted funds accounted for 8.47 per cent of the $23bn total revenue generated by the federal government during the year under review.
NEITI specifically said NPCL could not account for $1.951 billion from the revenue it generated for the federal government in 2021.
It, however, did not name the other defaulting agencies.
The report, which was unveiled in Abuja yesterday, showed that $286. 423m was unremitted export crude sales; $871.145m unremitted domestic crude sales, $722.596m LNG dividend, $859,583 miscellaneous revenue, $24.332m transportation revenue, and $45.758m unremitted domestic gas proceeds. The report also revealed that the NNPCL spent $6.931bn as expenditure during the period.
It added that only $13.2bn, making 57.27 per cent of total revenue, was remitted into the federation account.
The report added that the total outstanding taxes payable to FIRS as at July 31, 2023, was $13.591m, while the total amount of outstanding federation revenue payable to Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as at December 31, 2022, was $8.251bn, with over 80 per cent of the outstanding liabilities owed by NNPC.
It noted that the non-payment of the funds as at when due was a constraint on revenue flow to the federation account.
The report also revealed that between 2006 and 2021, a total sum of N8.1trn was spent on fuel subsidy, with N1.1trn spent in 2021 alone.
The report called for collaboration between the Economic and Financial Crimes Commission (EFCC) and Niger Delta Development Commission (NDDC) in the recovery of outstanding NDDC levies, stating that there would be a need for further reconciliations of payments made by companies to EFCC to determine amounts recovered and amounts outstanding (if any) in the EFCC account because the NDDC could not provide independent records of such payments.
The report observed that none of the four refineries in the country was operational in 2021 despite the NNPC spending about N200bn within 2020 and 2021 on refinery rehabilitation.
It said Nigeria lost 22,735 barrels or 3.72 million litres of crude oil in 2021, with 410 incidents reported, which was a 22 per cent rise in incidents when compared to 18,563 barrels or three million litres recorded in 2020 in 384 incidents.
'Why we released our findings'
Commenting on the report, the Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji, said the initiative provided information and data on Nigeria's oil and gas sector with special attention in helping the government to recover resources that it needs to address the numerous national development issues, especially poverty reduction through resource mobilisation and deployment. Orji said the report was prepared in line with the Extractive Industries Transparency Initiative (EITI) Standard 2019 and the NEITI Act, 2007.
On his part, Executive Secretary of the Nigeria Content Development and Monitoring Board (NCDMB), Engr Simbi Wabote, said the report should not be thrown under the carpet, and encouraged the National Assembly to discuss its findings during plenary to recover unremitted funds by the NNPC and private companies.
We believe in transparency - NNPCL
The Chief of Compliance of NNPCL, Nasir Usman, said the company had, over the years, engaged in open management to ensure transparency and accountability.
Usman, who represented the Group Chief Executive Officer of NNPCL, Mele Kyari, said the report provided a comprehensive insight into the activities of the extractive industry and the way in which national resources were being managed.
"NEITI report promotes open accountable board. The need to ensure transparency in the management and utilisation of our natural resources is vital to promote accountability and bring socio-economic benefits to the citizens of this country.
"This has become even more critical today in view of recent happenings across the world, which has compelled a global shift of focus on natural resources. There are demands in some quarters to reengineer the international monetary system and introduce resource backed currency for international transactions.
"The NEITI process supports national stakeholders in promoting good governance in the extractive sector. NNPC is, therefore, committed to working with NEITI to promote collaboration in multi stakeholder group, enhance mainstreaming of data that will be used to conduct further analysis, including creating avenues for discourse to strengthen the extractive sector governance."
According to him, it is incumbent on everyone "To ensure the nation derives optimum benefits of financial resources and to ensure the benefits are shared to all citizens in the most transparent, equitable and fair manner."
Chairman, Senate Committee on Petroleum Upstream, Senator Eteng Williams, urged NEITI to continue to ensure revenue mobilisation for the country "now that subsidy is gone."
Chairman, House of Representatives Committee on Petroleum Resources, (Downstream), Hon. Ikeagwuonu Ugochinyere (Ikenga Imo), pledged the support of his committee to lay the report on the floor of the House and debate it extensively to ensure the implementation of the recommendations made therein, as enshrined in Sections 3 and 4 of the NEITI Act.
"Working together, we will ensure the realisation of the government's desire to diversify the economy for the attainment of alternative source(s) of revenue and clean energy that will bring about the realisation of the projected one trillion-dollar revenue for Nigeria in the next 8 years," he said.
The Minister of Budget and National Economic Planning, Abubakar Atiku Bagudu, represented by the Permanent Secretary, Nebeolisa Anako, said the data generated by NEITI would help the ministry in its planning mandate for the country.
FAAC queries NNPCL over $55m NLNG dividend
Meanwhile, the Federation Account Allocation Committee (FAAC) has launched an investigation into what the NNPCL did with some dividends from the Nigeria Liquefied Natural Gas (NLNG).
An ad-hoc committee is currently reviewing and comparing the amounts due for subsidies, taxes, royalties and other payments, with the amounts that have been received or paid so far.
According to the report of the FAAC post mortem sub-committee for August, $275m accrued as dividend from the NLNG.
NNPCL reported that out of the total, $220mn was used to pay off the nation's debt on subsidy, which is 80 per cent of the total dividend.
However, NNPCL withheld $55m or 20 per cent that should have been paid to the nation's coffers, a development the committee said was unconstitutional.
The ad-hoc committee had its inaugural meeting on July 26, written to NNPCL requesting for the details of dividend accrued from NLNG operations from inception to date.