The last may not have been heard about the alleged unremitted oil revenue by the Nigerian National Petroleum Corporation (NNPC) into the Federation Account. The Central Bank of Nigeria (CBN) Governor, Mallam Sanusi Lamido Sanusi CON, has established that of the $67 billion worth of crude shipped by the NNPC between January 2012 and July 2013, only $47 billion was remitted to the Federation Account.
This revelation was made by the CBN Governor on Tuesday, February 04, 2014 at the Senate Committee on Finance investigating the alleged unremitted oil revenue by the NNPC into the Federation Account.
Sanusi made the revelation in Abuja on Tuesday at the resumed hearing on the alleged unremitted $49.8 billion oil money by the Senate Committee on Finance. Sanusi insisted that out of the total value of $67 billion being the amount of crude oil shipped by NNPC between January 2012 and July 2013, only $47 billion was remitted to the Federation Account.
Accusing NNPC of trying to mislead Nigerians, Sanusi in the executive summary of his written memo said, “I am therefore compelled to present to this committee detailed evidence that NNPC has in violation of the law and the constitution been diverting money from the Federation Account, and involving itself in activities that warrant full investigation for more serious violations of the law”.
He further accused NNPC of serious infractions in the handling of kerosene subsidy. He argued that “based on National Bureau of Statistics (NBS) data, kerosene is not a subsidized product, and therefore the so-called subsidy is rent generated for the benefit of those in kerosene business”.
Revealing the Federation Account was made to lose $100 milliom every month to the subsidy racket, he urged the committee to insist that NNPC provide evidence of Presidential authorization to buy kerosene at N150 per litre and to sell same at N40 per litre, whereas the product sells at between N170 – N220 per litre in the open market.
On the NNPC’s claims of paying subsidy on behalf of Government, he said the claims are not credible and indeed contradicted by the fact the NNPC had consistently rendered returns to the Federation Account Allocation Committee (FAAC) indicating that it made no deductions for subsidy.
Sanusi makes fresh $20 billion missing oil money claim
He identified NNPC’s unverified claims for subsidy and unilateral deductions from the Federation Account as a major source of revenues from the system and urged the Committee to order a thorough independent investigation into the activities of NNPC.
He stated that it was up to the NNPC given all issues raised, to produce the proof that the $20 billion unremitted did not belong to the Federation or was legally and constitutionally spent.
On the claims by the NNPC that the initially agreed $10.8 billion was expended on petroleum subsidy, the CBN Governor said such claims are “not credible”. According to him, “from April 2012, NNPC has consistently rendered returns to Federation Accounts Committee (FAC) indicating that it made no deduction for subsidy.
Mr Sanusi posited that the onus of proof is now on NNPC to show from where it obtained authorization to purchase kerosene at N150/litre from the Federation funds when in actual fact late President Yar’ adua had issued a presidential directive eliminating this subsidy payment with effect from July 2009.
Sanusi therefore called for full scale and independent investigation into the non-remittance issues as simple explanations will not suffice.
As panacea to this lingering remittance crisis and to ensure transparency in the operations of the corporation, Mr. Sanusi recommend the termination of product swap arrangement while proper audit of sales arrangements by the NNPC and its subsidiaries should be carried out and possibly prohibit it from entering into any form of shoddy agreements in future.
The Chairmen of the Committee, Senator Ahmed Mohammed Makarfi has invited all parties to appear before the committee with their submissions on next Thursday, February 13 unfailingly.
In what seems like a circus show without any tangible progress made over reconciliation exercise, none of the agencies concerned could come up with any tangible result from the reconciliation exercise, which commenced before the last Christmas holidays.
The Chairman of the Senate Committee, Senator, Mohammed Ahmed Makarfi, frowned at the apparent delay being exhibited by various agencies involved and had summoned all the parties concerned to appear unfailingly before the Senate Committee hearing on Tuesday, February 04, 2014.
It will be recalled that a letter meant to alert President Goodluck Jonathan on these irregularities from the CBN Governor was leaked to the public last December, generated a lot of public debate on the issue.
..Kerosene subsidy a scam
The Governor of the Central Bank of Nigeria (CBN), Mr. Sanusi Lamido Sanusi has declared that claims by the Nigerian National Petroleum Corporation (NNPC) of spending money on kerosene subsidy are not credible.
Sanusi made the declaration at the resumed Senate Investigative Public Hearing on unremitted oil revenue in Abuja on Tuesday, February 4, 2014, stressing that the sum of $20 billion was unremitted to the Federation account by the Nigerian National Petroleum Corporation (NNPC) between January 2012 and July 2013.
According to the CBN Governor, the NNPC, by paying kerosene subsidy, confessed to a number of serious infractions. Referring to the data provided by the National Bureau of Statistics (NBS), he stressed that kerosene was not a subsidized product, adding that the so-called subsidy was rent generated for the benefit of those in the kerosene business.
Producing evidence that former President Yar’Adua had issued a presidential directive eliminating subsidy payment on kerosene as from July 2009, Sanusi said the huge losses inflicted on the Federation Account have not been appropriated.
Speaking further, the CBN Governor said the burden of proof was on the NNPC to show where it obtained authorization to purchase kerosene at N150/litre from Federation funds and sell at about N40/litre, knowing full well that the product sells in the market at N170-N220/litre.
Citing records of the Nigeria Ports Authority (NPA), Sanusi said the records suggest that the NNPC imports about four to six vessels of kerosene a month. Similarly, he said based on industry sources, the Federation Account loses $100million monthly due to racketing in the industry.
He went further to list three outstanding issues that the NNPC needed to prove. These, he said, were the $12 billion out of the domestic crude sales yet to be remitted; the $6 Billion shipped on behalf of the NNPC; and the $2billion “third-party” financing as well as other claims bothering on pipelines repairs, maintenance and strategic reserves among others.
Concluding his submission, the CBN Governor proffered five recommendations for protecting the economy from what he described as unsustainable losses. He advised that the NNPC should stop collecting 440,000bbl daily as Domestic Crude and that all crude for product swaps should be terminated and crude should be exported and sold at market price.
Among others, he said, where the NNPC needs to generate cash flow to fund PMS import, such could be borrowed on the approval of the Finance Minister, for 90-120 days.
Rounding-off, he suggested that all the SAAs entered into by the Nigerian Petroleum Development Company (NPDC) should be investigated for constitutionality, adding that the tax arrangements entered into with the parties should be reviewed and all revenues due to the Federation Account collected.
“If possible, the SAAs should be terminated and the NNPC should be prohibited from entering into any SAA in the future”, Sanusi added.
He reiterated that the NNPC should account for subsidies claimed in 2010-2013 by producing documentary proof of legitimacy in addition to producing their authorization for paying kerosene subsidy after July 2009.