We owe Federation Account N326bn, not N3.23tn —NNPC

The Nigerian National Petroleum Corporation on Wednesday said it did not fail to remit N3.325tn to the Federation Account but admitted that it owed the government N326.14bn, which was still being reconciled.

In a response to the revelation of the Auditor-General of the Federation to the National Assembly on Monday that the NNPC failed to remit the sum of N3.235tn to the Federation Account for the period ended December 31, 2014, the firm stated that the AGF was incorrect.

The corporation, in a document signed by its Group Executive Director/Chief Financial Officer, Finance and Accounts, Mr. Isiaka Abdulrazaq, said, “The NNPC wishes to state in strong terms that the AGF’s declaration is inaccurate.

 

“The Auditor-General of the Federation’s declaration is erroneous. It should also be noted that although this period is before the new NNPC management was appointed in August 2015, the management still deems it fit and important to correct any misinformation about the activities of the corporation as this will adversely affect its current and future financial and operational plans if not corrected.

“The declaration by the AGF may have been born out of misunderstanding of how revenues from crude oil and gas sales are remitted into the Federation Account.”

Explaining how the fund was utilised, the corporation stated that as part of its responsibilities, the NNPC got an allocation of 445,000 barrels of crude oil per day for processing into petroleum products for distribution across the country.

It said any unprocessed crude was sold and the proceeds used to pay for the importation of petroleum products.

According to the corporation, the proceeds from the sale of the products are remitted to the Federation Account after deducting the cost associated with the supply and distribution.

The costs, it said, included subsidy on petroleum products.

The NNPC argued that it was entitled to claims on subsidy from petroleum products sold at government-regulated prices, whether imported or locally refined.

It said the total amount of subsidy that had been approved and certified for the corporation by the Petroleum Products Pricing Regulatory Agency for the period of January 2012 to December 2014 was N2.34tn, adding that an additional N7.96bn subsidy claim was still under reconciliation.

Another cost, it stated, was crude oil and petroleum product losses, which were as a result of vandalism on its network of pipelines for the period of January 2012 to December 2014, amounting to N202.68bn.

The last cost, according to the NNPC, is the petroleum product holding cost and pipelines and maintenance cost for the period of January 2012 to December 2014, which amounted to N358.88bn.