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Okonjo-Iweala wants NNPC to explain unremitted NLNG’s $4.84bn

By on August 1, 2013

Minister of Finance and Coordinating Minister for the Economy, Ngozi Okonjo-Iweala, has called on the Nigerian National Petroleum Corporation (NNPC) to explain the non-remittance of $4.84 billion dividend payments from the NLNG to the Federation Account.

The minister, who spoke in Abuja on Monday at the public presentation of the Nigeria Extractive Industry Transparency Initiative (NEITI) complete audit of the petroleum industry from 2009 to 2011, said “as a Finance Minister under pressure to bring money at a period of acute shortage, I am seriously interested in that money.”

She described the report which disclosed that Nigeria produced 2.5 billion barrels of crude amounting to $145 billion, as candid and detailed.

Okonjo-Iweala, however, insisted that the value of the report “has to be in the implementation of its recommendations” and assured that government would work with all entities involved to recover whatever fund that is outstanding.

Presenting the audit report conducted by Sada Idris & Co., Chairman of NEITI Board, Ledum Mitee, noted that it covered key areas such mapping of hydrocarbon flows, volumetric analysis, technical assessment of hydrocarbon streams and examination of procedural system.

According to the report, in the three years under review “over 136 million barrels which is estimated to be $10.9 billion was lost to crude oil theft and sabotage. This amount which was 7.7 per cent of the total revenue accrued to the federation in the audit period is considered significant.

“This was in addition to a loss of about 10 million barrels valued at $894 million as a result of pipeline vandalism in downstream operations.”

The report also disclosed that that the country “made total subsidy payments of N3 trillion to importers of refined petroleum products.

This was made up of N1.4 trillion fuel subsidy claims by the NNPC for the period 2009-2011 and a total of N1.6 trillion paid to other marketers during the same period.

“The report observed that the disparity between subsidy claims paid from the Federation Account and that of the Petroleum Products Pricing Regulatory Agency (PPPRA) was N175.9b during the period.”

Mitee explained that the Office of Accountant General of the Federation reported to the auditors a “total subsidy payment of N2.825 trillion while the PPPRA disbursed N3 trillion to marketers during the same period. The report further noted that some marketers disagreed with the amount ascribed to them by the PPPRA.

“In particular”, the report added, “in 2010 a marketer claimed N2.56 billion as fuel subsidy but the PPPRA recorded payment of N1.5 billion, leaving an un-reconciled difference of N1.04 billion.”

From the findings of the report, “the subsidy payments made through NNPC increased from N198 billion in 2009 to N416 billion in 2010 and nearly doubled when it rose to N786 billion in 2011.

“During the same period, subsidy paid through PPPRA increased from N208 billion in 2009 to N278 billion in 2010 and also increased astronomically to N1.12 trillion in 2011.

“Details of our findings on the fuel subsidy regime are clearly explained in the report.”

NNPC Group Managing Director, Andrew Yakubu, who also attended the presentation, assured that issues raised in the report, including the NLNG dividend payments, would be studied by the corporation.

Yakubu explained that NNPC was happy to partner with NEITI, stressing that the corporation has “renewed vigour to support anything that will add value to our economy. We will continue to carry NEITI along.”

He expressed delight that the audit has gone beyond just figures to look into the hostile environment in which NNPC operates.

“We are being asked to produce financial result for the country in an environment that is not only financially hostile but also physically hostile to the operators,” he added.

 

 

[Daily Independent]