The federal, state and local governments are believed to be indebted tothe Nigerian National Petroleum Corporation (NNPC) to the tune of N797 billion.
In a 136-page report by the Nigeria Extractive Industries Transparency Initiative (NEITI), the debts might not be unconnected with the expenses incurred as subsidy (on fuel importation) in the period under review but which was not paid by government.
The report, titled: “Pilot Study on Commodity Trading for 2017,” focuses exclusively and extensively on the sale of Nigeria’s share of crude oil and gas produced in 2017.
The report, which gave a breakdown and analysis of oil and gas production in 2017, also disaggregated the federation’s share of production by types, allocation, uses, details of the revenues derived from the sales, the receiving accounts, and allocation of revenues.
Details of the report made available by NEITI spokesman, Orji Ogbonnaya Orji, showed that total revenue from sale of the federation’s share of oil and gas for 2017 was $14.5 billion of which $13.18 billion or 90.8% was from crude oil while $1.32 billion or 9.1% was earned from gas.
A further breakdown of key findings in the report shows that out of the 240.9 million barrels of production that went to the federation as its share of oil produced for 2017, Domestic Crude Allocation (the crude assigned for local supply of refined products) was 105. 9 million barrels or 44% of the share.
FIRS Liftings was 57.3 million barrels or 24% of federation share; Federation Export was 50. 2 million barrels or 21% of federation share; Third Party Financing 17.6 million or 7% of federation share while DPR liftings was 9.9 million barrels or 4% of federation share.
But the report found that NNPC deducted N297 billion from earnings from the Domestic Crude Allocation (the crude assigned for local supply of refined products) as costs and losses for under-recovery on petroleum products (N141.6 billion), N25 billion for crude and product losses; and N130.4 billion for pipeline repairs and maintenance.
It further found, however, that the sum of N77.92 billion was under-remitted by NNPC to the Federation Account from Domestic Crude Allocation in 2017.
NEITI said in the report that “NNPC acknowledged the under-remittance and stated that there is an ongoing reconciliation to net off the N77.92 billion from “the established federation indebtedness to the corporation of N797bn arising from KPMG Forensic audit of the corporation at the instance of the federation.”
This is not the first time the corporation has claimed of being owed by the federation.
NNPC has since 2017 being the sole importer of PMS in the country.
Immediate past GMD of NNPC, Maikanti Baru had in January 2018 when he appeared before the Senate Committee on Petroleum (Downstream) investigating the subsidy regime, said the corporation incurred N5.1 trillion as subsidy between 2006 and 2015 but that only N4.9 trillion was paid to it.
“NNPC incurred N5.1tr as subsidy as approved by the Petroleum Products Pricing Regulatory Agency (PPPRA), but only N4.9tr was paid. The NNPC is being owed N170.6bn by the federation,” Baru had said.
Source: Daily Trust