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Published On: Fri, May 18th, 2018

Govs query NNPC over 60-65m litres daily petrol consumption claim

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By Lawrence Olaoye

Governors, under the auspices of the National Economic Council (NEC) have queried the Nigerian National Petroleum Corporation (NNPC) claims that it supplies between 60-65 million litres of imported petrol for local consumption daily.
Briefing newsmen after a meeting with the Vice President and Chairman of NEC, Yemi Osinbajo, , Chairman of the Nigeria Governors Forum (NGF) and leader of the Council panel on shortfall in remittances of revenues into government coffers, Zamfara state governor Abdulazeez Yari, also disclosed that his committee found out that the NNPC has not been remitting royalties on exported crude into government coffers.
According to Yari, the sudden increase in the volume of local fuel consuption when price of crude was gaining steady rise at the international market was suspicious.
He noted that before the increase of the price of crude, the NNPC put the volume of local fuel consumption at between 33-35 million litres per day only to change the figure when it began to pay itself subsidy on imported fuel.
Yari said “On the issue of cost recovery, otherwise called subsidy, the issue of subsidy resurfaced again after the efforts of Mr. President. Before now the oil was $40 per barrel and now it is about $78 a barrel, so therefore they are depending largely on importation. So therefore, the cost is higher than what they are selling at the filling station and they need more money.
“When there was no cost recovery, the NNPC clearly gave us the number of 33 and 35 million liters per day as the consumption of Nigeria. But now with the new regime of cost recovery, NNPC is claiming daily consumption of 60 and 65 million liters per day which we rejected. So many of our international partners are saying that even if we are feeding Nigeria, Cameroon, Ghana and Niger, we cannot consume more than 35 million liters per day. So we are wondering where the 60 million liters is coming from. So, we are trying to sort that one out, that one is not yet resolved.
“But, we are now taking a very hard decision, that because NNPC said the reason why they were lifting 60 million per day is because our borders are porous, so we have taken the decision that any filling station that is 10 kilometers to the border side should be closed by DPR. And, then we will do recertification according to the needs.
“Secondly, we have directed the minister of Finance in collaboration with the DPR and the NNPC to order tracking devices on every truck in other to monitor where they are discharging the fuel. Because, we are suspicious of the number, we cannot confirm the difference from 30 million liters per day consumption to 60 and 65 million liters per day consumption.”
On the issue of non-remittances of royalties, Yari said “This is the second time we are meeting with NNPC in respect of remittances into the federation account. And, governors and the federal government are not satisfied with the way remittances are being made because there are so many questions raised on Nigeria, more especially on the 425,000 barrel domestic and 180,000 barrel component of Nigeria from the Joint Venture Partners.
We met last week the NNPC and we came and briefed our chairman of the National Economic Council. We raised three issues, one, the issue of royalties. Each and every barrel taken out of the country there is either 17 or 24 percent of it as royalty and there is 17 or 20 percent as tax. So, our main concern is that the Department of Petroleum Resources (DPR), said that the NNPC is not remitting anything payment of royalty, what they do is that they transmit direct from the NNPC to the federation account which is not allowed by the law. According the law that established the DPR, section 196 of the Act, said all the royalty should be paid to DPR and then transmit to the federation account, which is not.
“So, we discussed today and we have sorted those ones out. The NNPC will not transmit to federation account with clear distinction that this amount is for royalty and X amount is for taxes, and X amount is profits from the sales. So we achieved that.
“At the same time, NNPC is making payment on behalf of Nigeria on Cash-Call contribution and also the NNPC is making payment of cash Call arrears of Nigeria’s contribution. But, our main concern is that in 2015, they said about $16.8 billion, which is outstanding, was not paid by the last administration and they negotiated it down to $5.1 billion according to them.
What we said specifically is that they should bring to us how much they have paid from 2015 to date and what is outstanding. And we directed them to stop payment until the claims are proven and then we can give further directives. That too was achieved.”

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