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Missing funds: NNPC claims spending $8.49bn on subsidy

By on January 11, 2014

The controversy surrounding the allegedly missing $10.8bn meant to be remitted to the Federation Account by the Nigerian National Petroleum Corporation took another turn on Friday as the NNPC claimed that it spent $8.49bn of the sum on petroleum products subsidy.

Prior to NNPC’s claim, the Federal Ministry of Finance is known to be the agency of government saddled with the task of offsetting subsidy claims on petroleum products to oil marketers.

But the NNPC, during a press conference at its headquarters in Abuja, argued that all relevant government agencies were aware that the corporation had been subsiding petroleum products without getting back these funds from the Federal Government.

The Group Executive Director, Finance and Accounts Directorate, Mr. Bernard Otti, stated that the sum in question was the expenditure incurred as part of the statutory responsibilities which the NNPC executes on behalf of the Federal Government.

He said, “The $10.8bn is made up of the following: subsidy claim, $8.49bn; pipeline management and repair cost, $1.22bn; product/crude oil loses, $0.72bn; and cost of holding the strategic stock reserves, $0.37bn.”

The Federal Government, in September last year, said it would spend a total of N971bn to subsidise petroleum product consumption in 2013. It, however, did not state whether subsidy payment to the NNPC was part of the N971bn.

The Governor, Central Bank of Nigeria had late last year alleged that the corporation failed to remit a whopping $49.8bn to the Federation Account between January 2012 and July 2013.

Of this sum, $30bn had been reconciled by the government agencies involved, while $10.8bn was still outstanding.

While buttressing Otti’s statement, the Director of Transformation and Corporate Services, NNPC, Dr. Timothy Okon, explained that there was a process by which revenues accrued into the Federation Account and argued that the corporation was mindful of this.

 

 

[Punch]