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NNPC may shun Senate’s order on $218.1m

By on July 14, 2014

Indications have emerged that the Nigerian National Petroleum Corporation may shun the Senate’s order to return $218.1m to the Federation Account.

The Senate on Thursday approved a recommendation by its Committee on Finance that the NNPC should return the money to the Federation Account, being the balance of the gross lifting under the third party financing.

But NNPC on Friday reeled out why it might not abide by the Senate’s directive.

The Group Managing Director, NNPC, Mr. Andrew Yakubu, told journalists that the template from which the recommendation was probably drawn was no longer business-friendly.

He said, “The Petroleum Support Fund was operating based on Petroleum Products Pricing Regulatory Agency (PPPRA) pricing template and it has many parameters, but unfortunately the operating environment has shown clearly that you cannot operate within that template.”

He said that if NNPC must be run as a profit venture, it must operate within the business environment that would enable it make profit.

The GMD said, “So, if you create a private template that does not consider some of the challenges that I face by virtue of the operating environment, then it is difficult.

“We have had challenges in Arepo and many other parts and you know very well that anytime that line is breached, I cannot use it. I have vessels and I also need to understand energy crisis in the country and this means that I must have strategic storage.

“Now, I don’t have access to my onshore facilities and my pipelines. But all these are not reflected in the pricing template and when PPPRA is reconciling with me, they use the template.”

Yakubu, however, said that if NNtPC had failed to provide petroleum prtoducts, the Senate would have summoned its management.

He said, “If I did not do it last year, the same Senate will summon me and ask me why there is no product. So, the only person that can do the Senate’s demand is a magician.”

 

[Punch]