It is no longer news that the Senate on Wednesday, 14th July, 2021 at plenary faulted the Nigerian National Petroleum Corporation (NNPC) over alleged under-remittance of N3.8 trillion revenue from Domestic Crude Oil Sales to the Federation Account between January and December 2015.
However, investigation by Swift Reporters revealed that the allegation is around issues that had been resolved by a Forensic Audit carried out by the Ministry of Finance in 2015 which showed a net indebtedness in favour of NNPC.
The amount allegedly under-remitted is the applicable subsidy and unrealized revenue from petroleum products sales and other operational costs for the period.
Below is the breakdown of the various components the alleged under-remitted amount which presented as claims and were duly validated by Forensic Auditors and the Auditor-General of the Federation:
Details Amount (Naira)
PPPRA Certified Subsidy (2012-Nov 2015) 2,439,859,459,982.00
Validated & Approved NNPC Claims (2004-2009) 797,710,684,354.00
Crude Oil and Products Losses (2012-Nov 2015) 245,184,597,565.65
Pipeline Maintenance Cost (2012-Nov 2015) 409,985,574,539.86
Operational Expenses 3,892,740,316,442.12
The root cause of the misunderstanding leading to the allegation is the non-incorporation of the above claims into the Accountant-General of the Federation’s report even though they had been validated by Forensic Auditors and the Auditor-General of the Federation.
Subsidies are operational costs as set out in the NNPC Act Section 7(d) which does not contradict the 1999 Constitution Section 80 (1) and Section 162 (1).
There is no doubt that the NNPC under the transparent and accountable Group Managing Director, Mal Mele Kolo Kyari will welcome the proposal by the Senate to approve a certain percentage of revenues for it as cost of collection as is the case with the Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and the Department of Petroleum Resources (DPR) in readiness for full deregulation.
It will be recalled that the Forensic Audit Report acknowledged that Section 7 Subsection 4 of NNPC Act empowers the Corporation to defray its costs and expenses including the cost of its subsidiaries from crude oil revenues. Though it also recommended that the laws be reviewed to make the Corporation meet its costs and expenses entirely from the value it creates.