NNPC, DPR heading for Showdown over Nigeria's Petrol Consumption Figures

Sun, Jul 15, 2018 | By publisher


Oil & Gas

The Nigerian National Petroleum Corporation and the Department of Petroleum Resources might be heading for a showdown over the actual litres of refined petrol the nation consumes daily.

In the middle of the disagreemeknt was the Nigerian Governors’ Forum (NGF), which accused the NNPC of reporting excessive petrol consumption figure to facilitate deduction of undue petrol cost (under-recovery) from domestic crude cost.

This, the governors reckoned, explained the shortfall in what NNPC remits to the Federation Account, noting that its allegation was based on the disclosure made to it by the DPR. But NNPC was unhappy that DPR provided information that contradicted its position to a third party.
 

The DPR had told the NGF that petrol under-recovery was derived from consumption or evacuation whereas NNPC claimed that PMS cost under-recovery was derived from actual import volumes.

A governor, who was privy to some of the exchanges between the NNPC, the DPR, the Minister for Finance, Kemi Adeosun, and the Presidency on the issue, said like the DPR, the governors had evidence to prove that NNPC was under-reporting.

For some weeks now, FAAC has not been able to conclusively hold its meetings, because of claims by the NGF that the NNPC was shortchanging the federation with exorbitant financial claims as subsidy over volumes of petrol it imports into the country.

The governors had called for an audit of NNPC’s petrol importation, claiming daily petrol consumption figures reported by the NNPC were overblown by the corporation so it could keep more money away from FAAC.

In a letter by NNPC’s Group Managing Director, Dr. Maikanti Baru, to Adeosun, which the governor allowed our correspondent to sight, the corporation said: “The minister is kindly invited to note that PMS cost under-recovery is derived from actual import volumes and not on consumption or evacuations as presented to the NGF by the Department of Petroleum Resources.

“We would like to bring to the attention of the minister, the assertion of the NGF that the NNPC is reporting excessive PMS consumption figures to facilitate deduction of undue PMS cost under-recovery from domestic crude cost.

“The position was further exacerbated by the DPR’s claim that there was never a time where PMS Truck Out (Evacuation) reached 60 million litres per day and that evacuation was the basis in which PMS daily average consumption is made.

“Additionally, the PPPRA evacuation data since January 2016 indicated average volume of 50 million litres per day.”

The letter was dated July 5th.

Hhowever, the letter appeared to be an effort by the corporation to explain its position on the June 2018 revenue remittance to FAAC, which has remained controversial till date, the letter suggested the DPR was suspicious of the volumes of petrol the NNPC frequently claimed to have imported and based its subsidy deductions on.

NNPC insisted that PMS cost under-recovery was based on supply and not evacuation or consumption and therefore accused the DPR of bad faith.

Even though the NNPC chief admitted that the corporation did not have an accurate data on the volume of petrol required by Nigeria on a daily basis and may have been importing petrol with figures the PPPRA handed to it, he was of the view that the DPR divulging such information to the NGF without confirming with it was aimed at embarrassing the federal government.

He said: “NNPC observes that the submission by the DPR was not well intentioned as they should have appropriately discussed and gotten alignment or explanations from PPPRA and NNPC before divulging to third parties. This should be guided upon to avoid embarrassing the government.”

Specifically, Baru insinuated it was probably the DPR that told the NGF that the petrol importation figures frequently claimed by the NNPC were not trustworthy.

But the NNPC, at a point, admitted that it did not know the actual petrol the nation consumes daily.

He said: “Honourable minister would recall the ongoing engagement by the inter-ministerial team composing Ministries of Petroleum and Finance with the participation of the NNPC, DPR, PPPRA, PEF, OAGF and the CBN to put in place a monitoring system for the entire fuel supply and distribution system in the federation.

“Also, the Ministry of Petroleum Resources is engaging the National Bureau of Statistics to establish actual consumption of petroleum products in the country. The outcome of these exercises may establish the actual fuel consumption in the country.”

NNPC said it had previously utilised 35 million litres per day as basis for supplying its shares of the national consumption.

The corporation also faulted the data provided by the DPR saying the figures might not be fully reflective of the actual evacuation figures from the various depots.

Baru alleged that the DPR failed to confer with the NNPC and the Petroleum Products Pricing Regulatory Agency (PPPRA) on the importation volumes before making a presentation to the NGF, adding that the NNPC charged subsidy based on the actual volumes of petrol it imports and not on consumption or evacuations from its depots.

It then added: “However, our evaluation of the PPPRA evacuation data for all depots and terminals from January 2016 to December 2017 indicated average load out of about 48 million and 50 million per day respectively.”

In the same letter, Baru disclosed that the corporation made deductions worth N88.91 billion as subsidy claims for May 2018 and part of outstanding subsidy claims for 2017.  –  ThisDayLive

– July 15, 2018 @ 11: 17 GMT /

Tags: