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Published On: Thu, May 29th, 2014

Missing $20bn: Makarfi panel clears NNPC

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Makarfi clears NNPC
  • Indicts corporation over unremitted $480m

By Ikechukwu Okaforadi

The Senate Committee on Finance headed by Senator Ahmed Mohammed Makarfi, yesterday submitted the report of its investigation of alleged non remittance of billions of dollars to the Federation Account by the Nigerian National Petroleum Corporation (NNPC), and tacitly cleared the corporation of the allegation that it withheld $20 billion from the said account.

However, the committee, in the report which was tabled before the Senate at yesterday’s plenary by Makarfi, indicted the NNNPC of not being able to explain the whereabouts of $480,069,354.02 ($480.06 million).

The suspended governor of the Central Bank of Nigeria (CBN), Malam Sanusi Lamido Sanusi, had 16 days before his suspension, accused the corporation of failing to remit $20 billion into the Federation Account.

“The NNPC did a presentation. We had all agreed that $14 billion out of the $67 billion they shipped came into the dollar account of the federation.

“We have looked at the Federal Inland Revenue Service (FIRS) numbers and we have confirmed that $16 billion paid by the International Oil Companies (IOCs) to the FIRS account was not paid by the NNPC but paid by the IOCs.

“It was the proceeds of the crude lifted in the name of the NNPC but sold on behalf of the FIRS. That $16 billion had been confirmed by the FIRS and accepted. There is the $1.6 billion that the Department of Petroleum Resources (DPR) also received from the IOCs, which is part of that crude and which the CBN has accepted.

“We have provided evidence in the naira crude account that out of the $28 billion domestic crude shipped by the NNPC, it had repatriated $16 billion. Out of the $67 billion that has accrued to the NNPC account, we have accounted for $47 billion.

“That is, out of the $67 billion that the NNPC shipped, $47 billion had been repatriated to the CBN. What we are talking about is the balance of $20 billion and what explanations had been given”, Sanusi said on February 4 this year, when he appeared before the Senate panel.

But the Makarfi led committee in its report only indicted NNPC of failing to remit $480 million, which included $262 million and $218, 069,354.32, being the money it spent on expenses it could not account for and the outstanding amount from gross lifting under the third party financing, respectively.

To this end, Senate committee directed the NNPC to refund to the Federation Account, the $480,069,354.02.

The committee further recommended that the subsidy regime should be discontinued forthwith, while the Senate leadership should expedite action to pass the Petroleum Industry Bill (PIB), which has been pending in the National Assembly.

The Makarfi led committee also directed President Goodluck Jonathan to prepare and forward to the National Assembly, a supplementary budget to cover the extra expenditure in the sum of N90.693 billion for Premium Motor Spirit (PMS) subsidy in 2012, and the sum of N685.910 billion for kerosene subsidy expended without appropriation by the National Assembly in 2012 and 2013.

Another recommendation by the committee was that the Nigerian Petroleum Development Company (NPDC), should remit to the Federation Account the sum of $447,817,884, being balance of royalty and petroleum profit tax.

Moreover, it condemned the decision of the NNPC to continue to transfer the federation’s oil mining licences (OMLs) to NPDC, which usually transfers same to third parties with lots of tax and revenue concessions, saying this action deprives the federation of vital income.

“All such transactions should be conducted in a transparent and competitive manner and devoid of revenue concessions”, the committee recommended.

The committee also barred the NNPC from paying its operational expenditures direct from federation funds without appropriation by the National Assembly, asking the corporation to strictly adhere to international best practices in keeping records.

It further barred the Petroleum Products Price Regulatory Agency (PPPRA) from certifying payments and deductions by NNPC when there is no appropriation for it, adding that NNPC should not control NPDC accounts to make for easy accountability.

The report of the committee is expected to be discussed at a later date as the Senate adjourned yesterday to next week, due to today’s public holiday.

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