Don't Miss

NNPC, PPPRA overdraw subsidy by N1.079tr in nine months – RMFAC

By on November 2, 2011

Drama, accusations and rising temper characterised yesterday’s investigation by the House of Representatives into the non-remittance of N450 billion into the Federation Account.

Federal Government top officials openly disagreed and confronted each other over the operations of the Nigerian National Petroleum Corporation (NNPC).

The Revenue Mobilisation and Fiscal Allocation Commission (RMFAC) yesterday accused the NNPC and the Petroleum Products Pricing and Regulatory Agency (PPPRA) of overdrawing the subsidy projection for 2011 by N1.78 trillion.

The Chairman of the RMFAC Elias Mbam told the House of Representatives joint Committees of Finance, Petroleum (Upstream and Downstream) and Gas resources, investigating the matter that the NNPC crude account is secret.

Mbam in his presentation said though the proceeds of export of crude oil and gas lifted are paid directly into the Federation Account with JP Morgan, “the proceeds from the domestic crude oil and gas lifted by NNPC are paid into NNPC’s account.”

On the subsidy deductions, he said: “It is clear that by the Appropriation Act 2011, the NNPC is to be paid N81.720billion from January to September, 2011. However, the NNPC has so far deducted N615.670billion, which shows a difference of over N533.950billion.

‘’Similarly, the PPPRA Marketers’ subsidy provides N102.753bilion as Appropriation for Subsidy in the 2011 Budget for the period January to September 2011, but by September 2011, the PPPRA (Marketers’ subsidy) has been paid N647.660billion, which shows a difference of over N544.907billion.”

The RMFAC boss said Signature Bonus, which is a premium from concession granted on oil blocks “is currently not being paid into the Federation Account. Such fund ought to have been paid into the Federation Account. At present, the revenue realised is being used to provide for manpower development in the Oil and Gas sector- through the Petroleum Technology Development Fund (PTDF).”

He said it is the view of the Commission that any budgetary allocation due to the Petroleum Technology Development Fund (PTDF) should be appropriated accordingly.

On crude oil remittances, he said the J.P. Morgan Account, where the payments for export crude oil and gas are made “are not largely being supervised and constitutionally monitored by the major stakeholders of the Federation Account,” particularly RMAFC.

“This situation makes the operation of the Account to be shrouded in secrecy and therefore, subject of several criticisms, suspicion and lack of confidence by all stakeholders.

The RMFAC boss said the operation of NNPC’s domestic crude oil and gas Account “does not promote transparency and accountability. Indeed, NNPC pays revenue from its domestic crude oil and gas into its operational Accounts and subsequently direct the Central Bank of Nigeria (CBN) to transfer specific amounts to the Federation Account. In the circumstance, NNPC should maintain a separate Federation Account for the domestic crude oil and gas. This will then allow for effective monitoring, transparency, accountability in the operation and remittance into the Account. It will then go a long way to check all deductions from the revenue due to the Federation.”

But Minister of State for Finance Yerima Ngama said it was wrong for Mbam to describe the NNPC’s activities as being kept in secret.