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FAAC Report: NNPC owes Federation Account N3.8tn

By on December 22, 2014

A report by the Post Mortem Sub-committee of the Federation Accounts Allocation Committee (FAAC) has alleged the Nigerian National Petroleum Corporation (NNPC) had outstanding domestic crude sales proceeds due to the Federation Accounts valued at N3.87 trillion incurred between January 2011 and August 2014.

However, the Petroleum Products Pricing Regulatory Agency (PPPRA) contended that the sum of N2.89 trillion was due to the NNPC as subsidy claims on petrol and kerosene within the same period.

Unsatisfied with the PPPA submission, THISDAY gathered that the sub-committee had further set up an ad-hoc committee to properly study PPPRA’s argument on subsidy entitlement to the corporation and advise accordingly.

But the report, which was signed by the Chairman, FAAC Post-Mortem Sub-Committee, Mr. Plus Akpaibor, a copy which was obtained by THISDAY further argued that even if the PPPRA’s figures were to be confirmed, as they were, the NNPC could still be owing as much as N980.88 billion to the federation account within the period under review.

The report further indicated that an estimated N180 billion from the domestic crude sales revenue which was due to the federation account between January to March 2012 was withheld by the corporation following delays by the PPPRA to certify subsidy claims since 2011.

Meanwhile, the NNPC also noted that the sum of $200 million had been remitted to the federation account from the satellite oil fields project (SOF) though no crude oil lifting had taken place this year following the expiration of Nigeria Export Supervision Scheme waivers required for the lifting operations.

It noted that though approval had actually been given by the Federal Ministry of Finance (FMF) to that effect, the Central Bank of Nigeria (CBN) had delayed communicating the approval to NNPC to commence crude lifting from the project within the year.

The NNPC further blamed the declining export crude earnings to the federation account on security issues and in favourable market conditions while arguments over a $5 million shortfall arising from the 2010 crude oil and gas sales was verified to have been paid into the federation account in June 2011.

 

[ThisDay]