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Reps reject NNPC’s N384.9bn loss statement

By on July 12, 2013

House of Representatives Committee on Finance, Wednesday, rejected N384.9 billion operational loss recorded by the Nigerian National Petroleum Corporation, NNPC, between 2009 and 2011.

The committee, which was probing Federal Government’s agencies’ remittances of surplus to the Consolidated Revenue Fund, CRF, within the period under review, expressed dismay that NNPC demanded to be exempted from remitting certain parts of its operating surplus to the CRF.

NNPC had argued that the exemption should be on the basis that it had never made profits, saying that it lost crude oil to vandalism totalling 2,316,281 barrels in 2010; 6,391,311 barrels in 2011 and 3,045,625 barrels in 2012.

The total barrels lost between 2010 and 2012 was put at 11,753,217.

According to NNPC, financial losses recorded in the upstream, midstream and downstream sectors amounted to N298 billion in 2009, N110.9 billion in 2010 and N37.6 billion in 2011.

Group Executive Director, GED, Finance and Accounts, Beard Otti, who addressed the committee, said that the NNPC was not in any position to remit any surplus amount to the CRF.

He said: ”Quantum of losses are indicative of crude and pipeline vandalism and unrecovered subsidy claims. It seems as if we are only working for thieves and vandals. Our business model defies description.”

However, the Abdul Jubrin-led committee questioned the integrity of the report as it was entirely internally computed without any input from external or a credible professional auditing firm.

The Committee further noticed inconsistent figures in the 10 percent gross margin presented against the breakdown that overshot the 10 percent by 1.17 percent.

While expressing its readiness to employ the services of professionals to investigate the NNPC’s report, it requested the corporation to finish it with details of its tax remittances.

The Committee asked the corporation to furnish it with details and sources of how it had been meeting its operational costs since it had always been operating at a loss.

It asked the corporation to account for what it did with the left over of daily domestic crude allocation, in addition to how it gets funds for the repair of vandalised pipelines since there was no appropriation for it.

The Chairman said: “Apart from issues of vandalism and oil theft presented by the NNPC, are we looking at the issue of inefficiency on the part of the corporation?”

The director’s appeal for three weeks to turn in the corporation’s response to the queries was also turned down by the committee.

 

 

 

[Vanguard]