The Nigeria National Petroleum Corporation (NNPC) denial of a shortfall of a whopping N4 trillion in remittals to the Federation Account has failed to impress the Senate’s Public Accounts Committee (PAC). PAC has, therefore, asked for documents to back explanations from the corporation’s Chief Finance Officer, Mr. Umar Ajiya.
The corporation said the amount represented an implied petroleum subsidy which government is still shouldering.
Ajiya agreed that there is confusion within government circles on the subsidy issue, adding that consultations are ongoing on how to handle the implication of sustained subsidy.
According the National Update newspaper, Umar was responding to a query by the Auditor General of the Federation over alleged unremitted N4 trillion by the corporation into the Federation Account.
The Senate Committee on Public Accounts had relied on the 2016 report of Auditor General of the Federation which accused the NNPC of non-remmittance of N4 trillion into the Federation Account.
The query read by a representative of the Auditor-General, Aghughu Adolphus Arhotomhenla, Olutoye Agesin, stated “It was observed upon scrutiny of NNPC report to the Technical Sub- Committee of Federation Account Allocation Committee meeting held in December 2016 that a cumulative total of N4,076,548,336,749.75 remained unremitted to the Federation Account by NNPC as at 31st December 2016.
“The total revenue unremitted as at 1st January 2016 (see the table above) from amounts payable into the Federation Account by NNPC was ₦3,878,955,039,855.73.
“The sum of N1,198,138,355,860.30 was due in revenue to the Federation Account out of the total generated in 2016, however, NNPC paid the sum of N1,000,545,058,966.20, resulting in an amount withheld of N197,593,296,894.02. This brought (about) the total amount withheld by NNPC from the Federation Account as at 31 December 2016.”
The Auditor-General, therefore, ordered the GMD of NNPC to remit all amounts due to the federation account, improve on the record of remittances of proceeds to the Federation Account and pay interest on the amount unremmitted.
But Ajiya said, “This has to do with the domestic crude that the NNPC takes in order to refine and sell products or takes to exchange and bring product into the country and side by side the Government has also fixed the price for PMS and that entails the accumulation of subsidy.
“This issue has been reoccurring for years even now it’s a topical issue in the government circles, a lot of consultations are ongoing because at the moment there is also more or less an implied subsidy as a result of the local consumption.
“What has happened in the past is that NNPC based on appropriation, and also appropriation for pipeline and security cost and maintenance, had been deducting these sums before remitting balances to the Federation account.
“It became a turbulent issue to the extent the Governors also got involved and they commissioned forensic audit by PPMC. The forensic audit has been done, the auditor general has a copy of the forensic audit.
“At the end of the day, that forensic audit established that NNPC was owing about N797b but also on the other hand the Federation was also owing NNPC, the net effect was that the NNPC was being owed N239bn, so there is nothing like N4tr withheld by NNPC.”
He said the books are with the CBN, adding that they can’t hide N4tr anywhere.
He said the said amount of over N4tr has gone through the consumption of PMS and that is why everybody has to be involved with respect to deregulation.
Members of the PAC could not understand how the NNPC would just wave off the allegation with the subsidy alibi.
Senator Ayo Akinyerule said the question by the auditor general is clear saying the answer to the query should be backed by documents
“Is that the response you can give to these questions for those of us who are not part of your management? Only two lines response is not adequate for this committee.
“We expect you to provide details as subsidy payments, pipeline repairs and management of crude oil and arrive at a figure whether NNPC is owing or it is Federation Account that is owing. This answer is not acceptable.
“We believe you should take us seriously at this end, there should have been proper computations on how they arrived at the N4tr and your defense to nullify it is not available to this committee.
The deputy chairman of the committee senator Ibrahim Hadejia in his concluding remarks stepped down the query and gave the NNPC one week to supply documents to back his response