The Ad-hoc Committee investigating pump price of petroleum products, chaired by Nnanna Igbokwe, on Wednesday has expressed concern over the revenues accrued into government coffers from crude oil lifting between 2014 to date.
The lawmakers frowned at the development during the resumed investigate public hearing held with officials of Auditor General of the Federation (AFG), Nigerian National Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR) and Petroleum Product Marketing Company (PPMC), held at the National Assembly complex, Abuja.
The Committee also resolved to invited Auditor General of the Federation (AGF) on Thursday, 23rd November, 2017 by 10am to shed light on all the transactions and revenues accrued from the crude oil production.
In the bid to ascertain the actual accruals into relevant government’s accounts, the Ad-hoc Committee also demanded for records of income generated from the 445,000 barrels per day allocated to Federal Government through Nigerian National Petroleum Corporation (NNPC) as well as the allocation allocated to other equity partners under the Direct Sales Direct Purchase (DSDP) arrangement which commenced in 2016.
To this end, the Ad-hoc Committee directed Department of Petroleum Resources (DPR) to provide records of all the seized illicit petroleum products imported into the country as well as records of all crude oil sent to the Federal Account Allocation Committee (FAAC) as well as the acknowledgement copies.
Also to be provided are: the output and incoming certificates on crude lifted by all the operators; all relevant documents generated at the crude oil loading points; standard adopted at the terminals.
According to Igbokwe, “preliminary findings show that 445,000bpd gives you 14 cargoes while 4 cargoes were ceded to the local refineries with the rest going to DSDP. However more than 445,000 is posted to DSDP from what (records) you gave to us as direct lifting from operators, so you need to give us better clarifications.
“As parliament, if all the projections of 2.2mbpd in 2016 go into the Consolidated Revenue Fund or Federation Account and in the 2018 budget estimates read by Mr President of 2.3mbpd, we should have adequate accounting for the production. This is why we need your cooperation,” Igbokwe urged.
The ad-hoc committee also requested DPR to single out transactions that cannot be tracked from its records but provided by other operators to the Committee.
Igbokwe also lamented over industry practice which permits lifting of crude oil at various terminals above the approved quantity without checks by various regulatory agencies.
The lawmaker observed that “the price from PPMC was N111.72 per litre but in the past 3 months it was increased by N6 raising the cost of PMS to N117 per litre to oil marketers. Ordinarily you expectt to see multiplier effects on the product but you observed that the pump price has been at N143 and N145.
While responding to questions raised by the lawmakers, Idris Abdulrahman and Usman Danusa who spoke on behalf of Department of Petroleum Resources said detailed reports of PMS imported by PPMC as well as other major marketers from January to October 2017 has been provided.
They however noted that the details on the truck-out are still being collated, adding that DPR may not be able to provide records of crude oil received by the local refineries from Kaduna, Port Harcourt and Warri from 2014 to date, because of the separation done from the inception of DSDP in 2016.
The delegation explained that all NNPC remits all the proceeds from the domestic crude oil lifted into the Federation Account though noted that DPR does not monitor whether the Corporation pays for all the cargoes but also give records of all the transactions to FAAC and Revenue Mobilization.
They added that reconciliation is done regularly with Revenue Mobilization and looks into the volume provided by DPR, adding that the revenues are expected to be paid by NNPC into government coffer within 3 months.
They however noted that 9.9 barrels were lifted in January 2017 against about 13.3 cargoes projected per day, just as the lawmakers queried the rationale behind the lifting of 15 cargoes in May 2017.
While responding to the lawmakers submission on the excess lifted in May 2017, the DPR officials affirmed that “people overshot what they are entitled to sometimes due to some extingencies. The idea is that they will pay back through overdraft.”
While ruling on the issue, Igbokwe requested for the records of those operators who engaged in such practice and the need for the AGF to handle such cases appropriately.
