Reps to probe $60bn revenue loss to NNPCL JV agreements

THE House of Representatives has resolved to probe the loss of over $60 billion in revenue due to inflated cash calls by the Nigerian National Petroleum Company Limited (NNPCL) Joint Venture (JV) Agreements.

Consequently, the House mandated its relevant committees to conduct a comprehensive investigation on all the NNPCL joint venture operations to determine income and cash call costs due to each partner, especially the nation, and whether due process and diligence were observed in the exercise.

The decision followed the adoption of a motion by Chika Okafor, a representative from Imo State, at the plenary on Wednesday, December 20, in Abuja.

Moving the motion, Okafor said NNPCL, on behalf of the Federal Government, operated joint ventures and related agreements with private oil companies in both oil and gas sectors, with the aim of sustainable revenue generation and economic development.

The lawmaker noted that the NNPCL, as representatives of the Federal government and the country, had about 60 per cent holdings while other partners shared the remaining 40 per cent.

He said the joint ventures operated under a “Joint Operating Agreement” that spelt out the responsibilities of each of the partners in the business.

Okafor explained that “Due to bloated cash call costs, the NNPCL Upstream Investment Management Services (NUIMS), a unit under the NNPCL in charge of negotiation of costs (both Capex and Opex) have caused huge losses in the neighbourhood of $60 billion over the years.

“The activities of NUIMS have resulted in huge revenue losses, fiscal deficits and an alarming debt profile. Aware of the need to ensure probity, transparency and value for money in the NNPCL Joint Venture operations.”

Meanwhile, the House has called for the remittance of accrued five per cent users’ charges on petroleum pump price and diesel to the Federal Roads Maintenance Agency (FERMA) for effective road maintenance.






     

     

    This was as the Green Chamber adopted a motion moved by Aderemi Oseni, a representative from Oyo, urging the Ministry of Petroleum Resources, NNPCL, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Ministry of Finance and Office of the Accountant General of the Federation to ensure that the users’ charge is immediately remitted to FERMA under Section 4(1) of the Agency’s (Amendment) Act, 2007.

    Leading debate on the motion, Oseni said to underscore the importance of funding to road management and maintenance, Section 4(1) of the FERMA (Amendment) Act, 2007 provides thus:- “The fund of the agency shall consist of five per cent users’ charge on pump price of petrol, diesel and of which 40 per cent will accrue to FERMA.”

    He expressed worry that since the commencement of the FERMA (Amendment) Act (2007) which contains this provision, the users’ charge had not been remitted to the agency, which he claimed had accumulated to about N900 billion.

    “Disturbed that the perpetual non-remittance of N900 billion in user charges on petrol and diesel pumps negatively impacts the agency’s finances and performance, consequently affecting the state of federal roads,” he stated.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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