Another House Probe of NNPC

Fri, Dec 13, 2013
By publisher


House of Representatives orders another probe of $13.9 billion of crude oil sales missing in the Nigerian National Petroleum Corporation between January this year and now

|  By Anayo Ezugwu  |  Dec. 23, 2013 @ 01:00 GMT

THE House of Representatives has ordered for another round of investigation into sales of crude oil remittances by the Nigerian National Petroleum Corporation, NNPC, barely eight months after it did so. The focus of the fresh investigation is on the volume and value of crude oil sales and remittances by the corporation from January 2013 to date.

Specifically, the Ad Hoc Committee of the House is to investigate the non-remittance of $13.9 billion into the federation account by the NNPC. The committee was set up following a motion brought to the floor of the House by Haruna Manu, entitled, “urgent need to verify and ascertain the volume and value of crude oil sales from January 2013 to date.” The ad hoc committee has, therefore, been mandated to investigate the volume and value of crude oil sales and remittances into the federation account from January 2013 to date by the NNPC and report back to the House within four weeks.

Manu based his submissions on Sections 162 (1) and 162 (10) of the constitution, which states inter alia that “the federation shall maintain a special account to be called the federation account into which shall be paid all revenues collected by the government of the federation, except the proceeds from the personal income tax of the personnel of the armed forces of the federation, the Nigeria Police Force, the ministry or department of government charged with the responsibility for foreign affairs and the residents of the federal capital territory.”

Andrew Yakubu, GMD, NNPC
Andrew Yakubu, GMD, NNPC

According to him, a shortfall of $13 billion  is unaccounted for in the period of January to August 2013. He noted that from September to date, no proper accounts have been rendered by the NNPC or records kept to show the actual amount and volume of crude oil sales by the NNPC.

Manu said there have been lingering issues of accountability and arbitrary management of oil revenue by the NNPC, saying there was a need to compel the corporation to render accounts of how much it derived from crude oil sales within the period and the actual amount it paid into the federation account.

Contributing to the motion, Aminu Suleiman and Ossai Nicholas Ossai, argued that the investigation has become necessary considering the volume of the amount involved, saying an ad hoc committee would do a good job. El-Badawy and Yakubu Balogun, said the revelation was disturbing and such an act by the NNPC jeopardises Nigeria’s future, arguing that the matter goes beyond the period raised by the mover of the motion to about five years.

On his part, Adeola Olamilekan, chairman, House Committee on Public Affairs, said that the issue of accounting for crude oil sales by the NNPC had been on for the last seven years without a solution. “One of the areas of concern is the NNPC’s Joint Venture operations. There are several billions of dollars that are unaccounted for. Some JV partners will come before the committee and give you information that the NNPC cannot contradict. Now, when you confront the NNPC with this information, they don’t address the issues at stake. Reports from the Auditor-General’s Office have many cases against the NNPC. When this investigation is being conducted, I urge the ad-hoc committee to liaise with the public accounts committee. We have information we can give to the committee to assist the investigation,” he said.

According to a recent revelation, the NNPC has remitted only $7 billion out of $20.9 billion of crude oil sales this year. Earlier last month, Rotimi Amaechi, Rivers State governor, cried foul over the disappearance of $5 billion from the excess crude account and asked for explanations from relevant government agencies. He said it was shocking to discover that the excess crude account which has a balance of $9 billion in January, had inexplicably dwindled to $4 billion without any explanation by the federal government.  The excess crude account in January was $9 billion. That account belongs to the federal, state and local governments. Today, it is $4 billion. We don’t know who took the $5 billion,” he said.

It could also be recalled that in March this year, the House also accused the NNPC of non-remittance of N142.7 billion internally-generated fund to the federal consolidated account. Abdulmumin Jibrin, chairman, House Committee on Finance, alleged that the NNPC never paid revenue it generated into the consolidated revenue fund. He said that the committee examined the NNPC books and discovered that the chunk of revenue generated by the corporation came from its subsidiaries. He said records showed that most of the subsidiary companies are operating on profit, irrespective of the margin while few are operating at a loss, particularly the refineries. “The case of the NNPC is unique because it has never paid a dime into the consolidated revenue fund. That is why we decided to put a lot of emphasis to see why it is the case,” he said.

Meanwhile, the Nigeria Extractive Industries Transparency Initiative, NEITI, has rolled out regulations to ensure that it sanctions any entity that falls short of remitting monies due to the government from its operations. Zainab Ahmed, executive secretary, NEITI, said that the NEITI Act of 2007 grants the agency the power to make regulations through which it can impose sanctions on erring companies covered in the NEITI’s oil, gas and solid minerals audit process.