Non-Remittance of N3.2 trn: House of Reps summons NNPC GMD, CBN Governor

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The House of Representatives has summoned the Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mr Mele

Kyari and Governor of Central Bank of Nigeria (CBN), Mr Godwin
Emefiele for non-remittance of N3.235 trillion ($19.253 billion) revenue accrued from sales of domestic crude oil in 2014.

Chairman, House Committee on Public Accounts, Hon. Wole Oke issued the directive during the investigative hearing into the audit queries
issued by the office of the Auditor General of the Federation (OAuGF)
for the period under review.

This is coming barely 10 days after the NNPC Group Managing Director
refused to honour the invitation sent to him on the
illegal withdrawals of $20.301 billion from the Nigerian Liquefied
Natural Gas (NLNG) Dividends account.

According to the details of the query, OAuGF observed that from the “examination of NNPC mandates to CBN on Domestic Crude Oil Sales and Reconciliation Statement of Technical Committee of Federation Account Allocation Committee (FAAC) meeting held in January, 2014 that a total sum of N3,234,577,666,791.35 was not remitted to the Federation Account by NNPC within the period under review.”

The OAuGF findings further showed that the “cost estimated for crude
and product losses was N55,964,682,158.99 which is about 50% of pipeline management cost of N110,402,541,010.88, names of contractors, location and amount paid to each for the pipeline Maintenance were not sighted for audit verification.

“Over 31 (N826,506,271,231.26 divided by N2,636,390,514,777.18
multiply by 100%) of the realized crude sales for the year were earmarked as other expenses apart from direct cost of productions
stated in NNPC reports for the year 2014. The breakdown of other
expenses was not provided for audit.

“From the above analysis, it means that the Federation Account is losing 31% (N826,506,271,231.26) being additional estimated cost from the total amount that should have accrue to Federation Account.

“From the total revenue of N3,234,577,666,791.35 as at 14th January, 2015 payable to the Federation Account by NNPC during the year, the
Corporation deducted the sum of N826,506,271,231.26) i.e
N660,139,048,061.39, N55,964,682,158.99 and N110,402,541,010.88) for
subsidy estimate, crude and product losses and pipeline management cost) respectively at source thereby resulting to net amount withheld figure of N2,408,041,395,560.33 shown in the above table to the Federation Account. All these deductions at source by NNPC were not approved by FAAC,” the audit query read in part.

While requesting the Accountant General of the Federation to inform
the NNPC Group Managing Director to explain the flagrant attitude of
withholding domestic crude oil sales revenue by NNPC which should be
refunded immediately, the OAuGF observed that there was no positive response on similar issue raised in 2012.

To this end, the OAuGF asked the NNPC Group Managing Director to
“provide names of the contractors, location, amount paid, to each for
the pipeline maintenance for verification. The process being used by PPPRA for the repayment of subsidy to the oil marketers should be used for NNPC instead of the latter deducting the subsidy at source; stop deduction at source by NNPC henceforth as this is a contravention of
Section 162(1) of the 1999 Constitution which stipulates that ‘all
revenue proceeds should be paid to the Federation Account’,” the
report read.

While reviewing the response of the Accountant General of the
Federation, Hon. Oke and members of the Public Accounts Committee
argued that the NNPC and CBN should cause appearance in persons, as
the Accountant General cannot provide sufficient evidence on the audit
query of such magnitude.

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