The Auditor General for the Federation Report on the investigative forensic audit into the allegations of unremitted funds into the federation accounts by the NNPC has generated heated debates by the two chambers of the National Assembly; Senate and the House of Representatives.
A forensic audit has established that Nigerian National Petroleum Corporation was owing about N797 billion but also on the other hand, the federation was also owing NNPC.
The net effect was that the NNPC was being owed N239 billion.
It will be recalled that the NNPC has been accused of withholding N4 trillion by the 2016 report of the Office of Auditor -General of the Federation (OAGF).
Fortunately, the NNPC Chief Financial Officer, Mr Umar Ajiya when he appeared before Senate Committee on Public Accounts, defended the queries raised by AOGF against the corporation objectively as expected of him.
Umar said that the issue in question had to do with Domestic Crude that NNPC lifted to either refine or sell in exchange for refined products imported to the country.
NNPC Chief Financial officer, Umar Ajiya, who represented the corporation told the lawmakers that the account in question was audited by KPMG at the instance of the Governors Forum and FAAC.
“The summary of the report indicates that NNPC was owing N557 billion and not N3.8 trillion. The same report established that NNPC was also owed N787 billion. In effect, the federation was owing NNPC N237 billion NGF funding account. From the Nigeria Gas company, the sum of $30.9 million dollars was expended by the NNPC through Nigeria Gas Company funding account. The AuGF has queried the benefit of that account to the federation.”
Meanwhile on NNPC deducting N865 billion from N2.4 trillion generated by the agency in 2015, the response of the Group Managing Director, Mallam Mele Kyari is also commendable as he said NNPC actions were backed by provisions of the law, which allowed it to make deductions of running costs from source.
“What we do is backed by the provisions of the law. First, the NNPC Act is very clear that we should submit revenues net of our cost.
NNPC, in a written response to the Committee said that the unremitted N4 trillion was arrived at without taking cognizance of the subsidy and pipeline repairs and management associated with domestic crude oil transaction.
According to NNPC, “Subsidy approved and certified by PPRA from 2010 to 2015 stood at the N4 trillion. Also in 2016, OMS under recovery stood at the N28.6 billion which brings the total unrecognized subsidy/PMS under recovery to N4 trillion. Aside the above, pipeline repairs and products losses incurred stood at N966 billion for the same period.”
It is better the Corporation work with the Senate Downstream Committee to assist in ensuring that the outstanding debt was settled to enable NNPC effectively achieve its obligation as the supplier of last resort to the downstream sector.
The Nigerian National Petroleum Corporation, NNPC rather need the support of the National Assembly and that of all stakeholders in the sector to ensure uninterrupted supply and distribution of petroleum products. and also put a end to pipeline vandalization.
It is also time the National Assembly quickly pass the Nigerian Petroleum Industry Bill 2020 as the bill does contain several positive provisions as well as provides the much needed clarity to resolve the issues of remittance
