NEITI Exposes Oil Sector Regulator Over “Missing” N4.4 billion

The Nigeria Extractive Industries Transparency Initiative, NEITI, has accused the Petroleum Products Pricing Regulatory Agency, PPPRA, of failing to account for the N4.423 billion recovered from 10 oil marketers as over-payments between 2008 and 2009 in its audit report and challenged it to show evidence of such remittance.

 

NEITI’s director of communications, Orji Ogbonnaya Orji, briefed journalists on Sunday in Abuja that there was no form of evidence that the recovered fund was remitted into the federation account.

 

He said that NEITI’s report which indicted the regulatory agency had recommended among others, that the PPPRA remit the over N4.4 billion recovered sum to the federation account as required by law, but that instead of availing itself of the remedial measures outlined in the report, the PPPRA chose to contest the findings of the report in the media.

 

“The PPPRA challenged NEITI on two fundamental issues, that it should explain the basis for its recommendations that it should refund to the federation account the sum of N4.423 billion and to provide proof that it actually participated in the audit process and indeed ‘signed-off’ on the report before it was released to the public,” he said.

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Orji said that NEITI auditors carried out painstaking procedure of data and information verification, reconciliation and validation,  holding series of consultations, meetings and visits all in efforts to lay to rest gaps in the submissions by the agency.

 

“When the draft report was finally ready, it was made available to all agencies for their vetting, and more inputs where necessary. I wish to state that the PPPRA received the draft report, reviewed it, and participated in the final reconciliatory meeting. After that meeting from where all other agencies and companies signed-off, the PPPRA still came up with additional information on the 28 of June; clearly two days before the final deadline via a letter with reference number A4/4/735/c.288/1/687/10. In that letter thePPPRA specifically requested NEITI to consider same as ‘superseding all earlier correspondences on the issues,” he told journalists.

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According to him,  following PPPRA’s letter, NEITI further requested it to urgently provide evidence on its claims such as bank statements of Petroleum Support Fund (PSF) payments for the period covered by the audit, schedule of collection of “over-recovery’’ from marketers and rationale for determination of national demands for petroleum products which the PPPRA never provided.

 

On the N4.423 billion subsidy ‘over-recovery’, Orji said: “We wish to put on record that NEITI audit report discovered that the determined total over-recovery from 10 marketers between 2008 and 2009 amounted to N14.073 billion.”

 

“From this determined collection, the federal ministry of finance deducted at source the sum of N3.127 billion, while the amount of N4.423 billion was paid by independent marketers into the PSFaccount managed and controlled then by PPPRA during the period. The PPPRA further netted off over-recovery due from the subsidy of marketers to the tune of N2.809 billion and remitted this to the federation account. Therefore, actual payments made by marketers amounted to N7.232 billion which is N4.423 billion plus N2.809 billion,” he said.

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The NEITI spokesman said he was worried by the seeming lack of transparency in PPPRA’s management of the PSF before it was transferred from it.

 

“Another important revelation of the report was that PPPRAprovided contradictory information during the audit process. For instance, the agency stated in its audited financial statement, that it paid the sum of N297.11 billion as subsidy in 2009, but in the information PPPRA supplied through the templates used for the audit, which it voluntarily populated and returned to NEITI auditors, the agency claimed it paid N207.80 billion,” he added.

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