$10bn oil money: Provide evidence of spending or refund – Okonjo-Iweala tells NNPC

Finance Minister, Dr Ngozi Okonjo-Iweala, has asked the Nigerian National Petroleum Corporation (NNPC) to provide evidences of expenditure of the disputed $10.8 billion unremitted oil revenue or remit to the Federation Account.

Speaking on Tuesday in Abuja, the Minister cautioned all departments and parastatals, to desist from making further pronouncements over the issue because checks and balances are not yet completed.

“The Federal Ministry of Finance is to ensure that the maximum amount of revenues flow into our national coffers – whether from oil or from non-oil sources, she said.

“After our initial reconciliation, we now have a revised amount of $10.8bn which still needs to be accounted for. This revised $10.8 billion outstanding is the amount put forward by the FMF, following ongoing reconciliation exercises with NNPC at FAAC meetings over the past two years.

“The next stage of this discussion is to ensure that these funds are paid into the Federation Account. Unfortunately, newspaper headlines will not bring money into the government coffers. What will actually bring in the money is the hard work of completing the reconciliation exercises to find out what NNPC has spent on its operations (with supporting invoices and documentation) and what has to be remitted to the treasury.

“This is the work we are actually doing. It has not been completed, so claims by any parties in this exercise are premature.”

Meanwhile, the NNPC has insisted that the $10.8 billion in question is not missing.

Group Managing Director, Mr Andrew Yakubu, in Abuja yesterday during a press conference on the status of gas to power plants, explained that a chunk of the money went into subsidy incurred ‎in fuel and kerosene.

‎According to him, the NNPC has directive from the federal government to sell kerosene at N50 per litre while the landing cost of the product is over N150.

He said: ‎”$10.8 billion is not missing, we try to explain to you that on monthly basis we file in our claims to the federation account and what it cost us to do this business. Now the biggest chunk of this $10.8 billion is the subsidy incurred in petrol and kerosene that is pet of NNPC’ s quarterly allocation to provide.

“Now NNPC is the only importer and producer of kerosene in Nigeria. NNPC brings in kerosene and sell at N50 and the landing cost of this is over N150. We compute these numbers on a monthly basis and that amount plus the subsidy on PMS which you all know and this amounts to about 80 per cent of this $10.8 billion,” he said.

“What we do is to account for it, these are unrealisable flows because they are subsidy, we don’t have control over the pricing and we are asked to account for the crude in international crude oil price. If you do not realise this because of the subsidy regime that does not allow you sell at the market price automatically there is an arbitrage and that arbitrage is what you do not have control over as NNPC,” Yakubu said.

He added that a similar situation is seen on the crude lines challenge and strategic assets that the Corporation keep on behalf of Nigeria, which are all obligations on NNPC which come at a cost.

“When you add up those costs plus the 80 percent I have told you that we incurred on subsidy we will clearly account for these unrealisable flows that account for the international oil price which we also account for.

Speaking further, the GMD stated that the cost of protecting the crude oil supply and product pipelines are paid for by the corporation.

He cited an example of oil transportation from Arepo to Warri, and from Warri to Benin, which are usually protected by the Police and the military.

“What we have simply done is to put all these into a cost profile including the volumes that we bring in and distribute and these volumes we simply multiply by the differentials and that is exactly what you get as this $10.8 billion.

“The $10.8 billion is not missing, if it is missing it is missing into the pockets of the beneficiaries which is you and me, “Yakubu stated.