Senate Investigates NNPC’s Alleged Unremitted $49.8 Billion Oil Proceeds

The Senate has launched investigations into the alleged unremitted $49.8 billion accruing from oil sales which the Nigerian National Petroleum Corporation, NNPC, allegedly failed to pay into the Federation Account.

The Senate finance committee headed by Ahmed Markafi is to conduct the investigation and report back as quickly as possible “but certainly not more than one week,” Senate President David Mark said.

The senate investigation stem from reports of a letter written by the governor of the Central Bank of Nigeria, CBN, and addressed to President Goodluck Jonathan, in which he expressed worry over what he described as huge shortfalls in amounts remitted to the bank for a period of a year and the half.

Sanusi said in the letter that the NNPC earned $65.3 billion from crude oil sales between January 2012 and July 2013 by selling 46 percent of Nigeria’s oil but only remitted 24 percent of this to the government’s account and that $49.8 billion representing 76 per cent of the total crude oil revenues within the period under review was still outstanding.

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However, the general manager, media relations department of the NNPC, Omar Farouk Ibrahim, has tried to shed light on the allegation which he says show clear misunderstanding of the workings of the oil and gas industry, as well as the modality for remitting crude oil sales revenue into the Federation Account.

“Revenues from crude oil liftings are in various categories, namely Equity Crude; Petroleum Profit Tax, Royalty, Third Party Financing and the Nigerian Petroleum Development Company, NPDC,” he said.

Ibrahim said that revenues from each of these categories are statutorily collected by different agencies of the government and that the NNPC collects only the Equity Crude which it pays  directly to the Federation Account.

“For the avoidance of doubt, it needs to be stated that the figure of 594.024 million barrels of crude oil given by the CBN as the total crude oil lifting for the period of January 2012 to July 2013 does not represent the correct picture of crude oil lifting for the period. From our records, the correct figure is 618.55m barrels. This shows that the CBN understated the actual crude lifting by 4.13%,” he said.

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Explaining further, the general manager said that the Petroleum Profit Tax is collected by the Federal Inland Revenue Service, FIRS and that while Royalty goes to the Department of Petroleum Resources, DPR, third arty financing goes to NPDC.

He said that the sum total of proceeds paid by the FIRS and DPR as PPT and Royalty respectively into the Federation Account with the CBN, make up the alleged unremitted $49.8 billion revenues.

Ibrahim stressed: “The 24% of total crude oil revenue receipts which the CBN governor is reported to have acknowledged that NNPC remitted represents the proceeds from the equity lifting which NNPC is directly responsible for. The alleged unremitted 76% was paid to the agencies that are statutorily empowered to receive them for onward remittance into the Federation Account.”

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He said there was need for institutions of the Federal Government and top government functionaries to seek understanding of issues that are not clear to them from relevant agencies before misleading the public with information that is capable of creating public disaffection.

The NNPC has in recent times been criticised for lacking transparency and for diversion of funds but the matter has always stopped on the table of probe panels with no punishment for those found culpable.

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