The Central Bank of Nigeria (CBN) and the Nigerian National Petroleum Corporation (NNPC)are at loggerheads again, this time over an alleged unremitted $20billion in oil revenues.
This came as ongoing investigations into the alleged $49.8 billion missing oil revenue took a new twist with the governor of the Central Bank of Nigeria(CBN), Sanusi Lamido Sanusi, claiming that the Nigerian National Petroleum Corporation (NNPC) was yet to remit $20 billion to the Federation Account and not the $10.8 billion earlier reported.
Sanusi told the Senate panel investigating the unremitted oil revenue that the accounts of the CBN showed that out of the $67 billion the NNPC shifted between January 2012 and July 2013, only $47 billion has been received by the apex bank, leaving $20 unaccounted for.
Meanwhile, the NNPC dismissed the claims, saying that this was not the first time the CBN Governor had made wild allegations about the NNPC and had come out to admit his mistake.
The NNPC recalled, that at a press briefing held by the Minister of Finance and Coordinating Minister of the Economy, the Minister of Petroleum Resources, the Governor of Central Bank and heads of DPR and FIRS, the initial figure of $49.8B was reconciled to $10.8B. It added that on the same
day, at the Senate hearing, the CBN gave a figure of $12B which was corrected by the Coordinating Minister of the Economy to $10.8Bn and that yet in yesterday’s presentation the CBN’s figure changed again to $20B.
It described this as a clear indication of CBN’s inconsistency.
It said the Central Bank’s figures keep changing, describing it as a worrying trend coming from an agency of government charged with managing the financial affairs of the country.
“While NNPC and other relevant government agencies are in the process of reconciling the $10.8B as accepted by all parties, we are surprised by the new $20B figure introduced by the CBN”, the NNPC said in a statement. It added that according to CBN the $20B was made up of $12B subsidy claim, $6B NPDC gross revenue and $2B third party revenue.
“This indicates that the CBN cherry picks the Figures” it said, adding that “for example in taking the entire $6B gross revenue accruable to NPDC and allocating
same to the federation account, CBN simply multiplied the gross production by the crude oil price; thereby failing to account for the operating costs (opex) and amortized capital expenditure that underpin the production. In other words, the CBN failed to take into account the cost of production.
“We reiterate that NPDC has been remitting the royalty and petroleum Profit Tax, PPT to the Federation Account. NPDC as a subsidiary of NNPC operates a business model similar to other international companies in Nigeria and abroad and will continue to be governed by these global best practices in the execution of these assets.
The CBN governor also said the NNPCs claims of payments for kerosene subsidies were fraudulent since there was still a valid presidential directive eliminating subsidy payments issued by the late President Yar’Adua since July 2009.
Giving a breakdown of oil receipts by the CBN, Sanusi said, “NNPC did a presentation and we have all agreed that $14 billion out of the $67 billion they shifted came into the dollar account of the federation. We have looked at the FIRS numbers and we have confirmed that $16 billion paid by international oil companies to the FIRS account was the proceeds of crude lifted in the name of Nigerian Petroleum Development Company (NNPC) but sold on behalf of FIRS. The FIRS has confirmed this money and Central Bank has accepted.”
He further said there was a $1.6 billion that DPR also received from IOCs, which was part of that crude, which the CBN has accepted.
“We have provided evidence that in the naira crude, out of the $28 billion domestic crude shipped by NNPC, it has repatriated $16 billion. We have also established and I think there’s no disagreement here that NNPC
shipped $67 billion worth of crude. But only $47 billion has come back to the federation. There is a $20 billion that has not come back, so burden of proof is on NNPC,” he added.
At the public hearing, Sanusi also queried NNPC explanations that some of the unremitted funds of up to $6 billion belonged to the NPDC and not the federation account.
In his presentation, Sanusi told the audience that the CBN has evidence negating these assertions, as he insisted that the corporation was actually paying to NPDC what belonged to the federation account.
“We have made suggestions that we question some of those explanations and we believe that some of that which has gone to NPDC does not belong to the NPDC but the federation account,” he said, adding that the apex bank’s position was that some of the crude shipped by NPDC was shipped from oil wells that belong to the federation, and as such the proceeds should not all go to the company.
“I have given three legal opinions to this committee on the unconstitutionality and illegality of that transaction,” the governor stated.
On NNPC claims that it had used some of the alleged missing funds to pay for kerosene subsidies, Sanusi said it was worrisome that from April 2012 till date, NNPC has submitted returns consistently before FAAC, showing
that it has not deducted monies for subsidies for PMS, and that it was
therefore surprising that having submitted nil returns since April 2012,“the corporation is now claiming that deductions were being made”.
Speaking further, he noted also that NNPC had explained that 80 percent of the money that had not been repatriated came on kerosene and fuel subsidy.
“I have submitted to this committee written evidence of a presidential directive eliminating kerosene subsidies since 2009. And NNPC still needs to provide authority for buying kerosene at N150 and selling at N40 and inflicting that loss on the federation,” he said.
Sanusi said it was not yet clear whether the said payments for kerosene subsidies were made, or whether PPRA has approved them, but that it would be interesting to see what the reconciliation committee finds at the end of the exercise.
“The other point about third-party financing and operating expenses which were not appropriated, we have not seen any documentation or proof,” he explained.
For its part, the NNPC said in its statement that “Regarding the subsidy claim on kerosene, it is important to note that NNPC as the supplier of last resort is the only company supplying this product in Nigeria for the benefit of the citizenry. If kerosene has been deregulated why are the
independent marketers not supplying this product in line with what is applicable to diesel (AGO). NNPC owes a duty to Nigerians to ensure that there are adequate products in the country. This mandate has without question been accomplished in the past four years.
NNPC deserve to be commended rather than battered, for ensuring adequate supply of kerosene at regulated price of N50.00k. NNPC cannot be held responsible for any differential pricing from non NNPC retailers. This is the basis for NNPC’s claim on kerosene subsidy.
Earlier, Bright Okogu, director general, Budget Office, told the public hearing that the involved parties had gone quite far with reconciliations of the NNPC revenue in order to unravel the actual missing money, assuring that the reconciliation process would be concluded by next week.
Makarfi, who chaired the event, warned that all concerned parties must provide written submissions before the next public hearing, while urging them to present themselves for their testimonies.
Also, Olusola Saraki, former Kwara State governor and a member of the committee, queried why it had taken so long for the reconciliation to be completed since the issue got to the public domain in December.
By: Onyinye Nwachukwu
