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NNPC fails to remit N1.7tr into Federation Account

By Yusuf Alli on 27/11/2017

Views: 885


The Federation Account Allocation Committee (FAAC) meeting was called off last Thursday over the non-remittance of about N1.78 trillion into the government’s coffers by the Nigerian National Petroleum Corporation (NNPC).

About N1.32 trillion of the outstanding was unpaid by the NNPC during former President Goodluck Jonathan’s administration.

The whereabouts of the cash remains unknown.

Also, from January 2016 to September 2017, NNPC has about N460.649 billion yet to be remitted into the Federation Account.

The states have queried why such huge cash from crude oil sales revenue will be tagged “outstanding” by NNPC since 2010.

They also demanded an update from the NNPC on about $172,913,617.30 million outstanding payments from the NLNG Feedstock sales, Chevron Cheetah Project, Royalty Oil Sales Value lifting by TEPNGA MCA, RDP Price Review and others.

But, the Minister of Finance, Mrs. Kemi Adeosun, who inherited the challenge of reconciliation between the states and NNPC at the FAAC, is said to be addressing the matter.

The minister, who is determined to bring the states back to the FAAC meeting, may also address the press on the stalemate.

The NNPC is insisting that FAAC owes it about N797 billion, being cost of product and pipeline losses.

It has asked the FAAC to give it a three-month grace to compile the lost data from its area offices as demanded by states and to complete a forensic audit of same.

Although the three-month period will lapse by the end of November, the states are insisting that there will be no FAAC meeting until the non-remittance of the N1.78 trillion is resolved.

Investigation revealed that the states had raised concerns over the NNPC’s outstanding N1.78 trillion at the FAAC Post-mortem Sub-Committee meeting on October 23 but the Federal Government did not know that it would degenerate to a likely boycott of the FAAC meeting last Thursday.

According to a document, the FAAC analysis for October 2017 fuelled the anger of the cash-strapped states.

The analysis, which was prepared by the FAAC Post-mortem Sub-Committee meeting, raised eight issues for the NNPC to clarify. They include the non-payment of N1.78 trillion into the Federation Account.

In the document, signed by the Chairman, FAAC Post-mortem Sub-Committee, Dr. Casimir I. Anyanwu, the committee gave the highlights of NNPC’s outstanding payments into the Federation Account during Jonathan administration and under the current administration.

About N1.32 trillion revenue from 2010 to 2015 is yet to be remitted by NNPC; about N460.649 has been unpaid between January 2016 and September 2017 bringing the total to N1.78 trillion.

The document said: “The Gross Domestic Crude Revenues between 2010 and 2015  amounted to N5, 351,114, 508, 433.79; the PPPRA’s certified NNPC subsidy from 2010 to 2015 was N4,026,369,698,361.62 and the Net outstanding revenues due to Federation is N1,324,744, 810,072.12.

“The statement of NNPC Gross Domestic Crude Oil Sales Revenue due to Federation Account for the period January 2016 to September 2017 is as follows: Crude Volume (220, 619,908); Value of domestic crude purchase (N2,573,022,429,022.30); NNPC payment to the Federation Account(N2,112, 373, 341, 362.49); Gross Outstanding due to the Federation Account (N460,649,087,660.12).”

The NNPC is said to be holding on to some outstanding payments because FAAC is yet to refund the N797billion it incurred as product and pipeline losses.

But this claim has been faulted by states because there is no proof from the oil giant.

All the stakeholders are said to be demanding a forensic audit of NNPC’s losses and how these led to the N797 billion bill.

Another document added: “On the product loss and pipeline repairs which NNPC was claiming, the Ad-hoc Committee recommended to the Sub-Committee to visit NNPC in order to:

*Verify and ascertain approvals to incur the expenses

*Examine all contractual agreements on pipeline repairs

*Identify the Strategic Reserves locations

*Examine the intervals at which the Strategic Reserves are kept and discharged.

“That the request by NNPC to include the sum of N797 billion as contained in the recommendations of the Tripartite Committee of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), the Federal Ministry of Finance (FMF) and NNPC should not be granted because of the clause that ‘no refund should be made to any of the parties pending the conclusion of the Forensic Audit up to 2015.’

“The Secretary FAAC Post-Mortem Committee informed members that the report had taken into consideration the observations raised by the NNPC when the report was initially presented in March 2015.”

Also commenting, the AD Allocation of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) reemphasised that the product and pipeline losses could not be ascertained yet because NNPC requested to be given three months to compile the data from the various area offices.

“Also, on the issues of N797 billion, which was granted to NNPC in the interim report of the Tripartite Committee, the amount had been verified.

“However, there was a clause in the interim report that stated that no party would be paid until the forensic audit was completed.

NNPC, it was learnt, plans to meet the Ministry of Finance and other FAAC members today.

A source said: “The governors are seeking more transparency in accruing revenue and remittances into the Federation Account. They have also demanded that NNPC should clear the backlog of outstanding payments into the Federation Account.

“All the states have insisted that NNPC must increase its inflow into the Federation Account. They believe what the corporation is doing could be tagged under-declaration of revenues.”

Source News Express

Posted 27/11/2017 11:10:03 AM

 

 

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