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*Says kerosene subsidy is a scam
*The CBN Governor is ignorant — NNPC
*The CBN Governor is ignorant — NNPC
*Senate cautions him over unsubstantiated allegations
ABUJA—Central Bank Governor, Sanusi
Lamido Sanusi, yesterday, told the Senate Committee on Finance that of the $67
billion crude oil sales that was supposed to be remitted to the Federation
Account, only $47 billion had been reconciled between the Nigeria National
Petroleum Corporation, NNPC and CBN.
But the Committee’s Chairman, Ahmed
Makarfi, cautioned the CBN Governor over making wild and unsubstantiated
allegations without concrete and specific figures to back them up.
The NNPC, in a swift reaction,
however, dismissed the allegation of another unremitted $20 billion oil revenue
raised against it by the CBN.
It is uncertain how Sanusi came up
with the fresh $20 billion unremitted funds against the initial $10.8 billion.
The latter figure was arrived at during the account reconciliation with the
Ministry of Finance, NNPC and CBN during a public hearing on alleged unremitted
$49.8 billion oil revenue organised by the Senate.
CBN’s arguments
But the CBN Governor, while making
the new allegation, stated: “All we have said as CBN to which there is no
disagreement is that NNPC shipped $67bn worth of crude. They have repatriated
or we have established that $47bn has come back to the Federation Account.
There is a $20billion that has not come back to us. The burden of proof is on
NNPC.
“We have made suggestions that can help
to answer some of the questions and we believe that even some of that which
they (NNPC) claimed were shipped by NPDC do not belong to the NPDC but to the
Federation.”
He said some of the issues were
subject to investigation which, according to him, had to do with whether NNPC
was repatriating money due to the Federation Account or not, adding that it was
necessary to investigate the issue because the NNPC had given a number of
explanations on why the money had not been remitted.
Sanusi said: “May I say, Mr.
Chairman, that some of those issues raised are subject to investigations. They
have to do with whether NNPC is repatriating money due to the federation
account or not and because NNPC had given a number of explanations for why
money has not come.
“If NNPC, for instance, says we have
sold $6billion worth of crude belonging to NPDC, and if the CBN believes that
part of that money should come to the Federation Account, it is related to this
matter and it had been captured in our presentation.
“We are here because they are
related to the question of whether NNPC is returning to the Federation Account,
all the amount it is constitutionally and legally required to return.
“I have a 20-page presentation with
30 appendages, but we have to first of all agree on what has been paid into the
CBN. NNPC did a presentation. We have all agreed earlier that $14billion out of
the $67billion they shipped came in to the dollar account of the federation.
“That is agreed. We have looked at
Federal Inland Revenue Service,FIRS, numbers and we have confirmed that
$16billion paid by international oil companies to the FIRS account was not paid
by the NNPC but paid by IOCs.
“It was the proceeds of crude lifted in the name of NNPC but sold on behalf of FIRS. That $16billion had been confirmed by FIRS and had been accepted. There is $1.6bn that DPR also received from IOCs which was part of that crude and which CBN had accepted.
“It was the proceeds of crude lifted in the name of NNPC but sold on behalf of FIRS. That $16billion had been confirmed by FIRS and had been accepted. There is $1.6bn that DPR also received from IOCs which was part of that crude and which CBN had accepted.
“We have provided evidence in the
naira crude account out of the $28billion domestic crude shipped by the NNPC,
it had repatriated $16billion.
“Out of the $67billion that has
accrued to the NNPC account we have accounted for $47billion. Out of the
$67billion that the NNPC shipped, $47billion had been repatriated to the CBN.
What we are talking about is the balance of the $20billion and what
explanations had been given.
“NNPC had said some of it do not
belong to the Federation Account so, $6billion NPDC we have held the position
that some of the crude shipped by the NPDC is shipped from oil wells that
belonged to the federation. Joint Ventures that Shell went out of, which NNPC
took over and handed over to NPDC, which then handed over to two Nigerian
companies and transferred revenues that should come to the Federation Account
for remittance.
“I have given free legal opinion to
this committee, on the unconstitutionality and illegality of that transaction.
“Secondly, NNPC had explained that 80 per cent of that money yet to be repatriated was on kerosene and fuel subsidy. I have submitted to this committee written evidence of a presidential directive eliminating subsidy since 2009, and NNPC needs to provide its authority for buying kerosene at N150 from the Federation Account and selling at N40 and inflicting that loss on the federation.
“Secondly, NNPC had explained that 80 per cent of that money yet to be repatriated was on kerosene and fuel subsidy. I have submitted to this committee written evidence of a presidential directive eliminating subsidy since 2009, and NNPC needs to provide its authority for buying kerosene at N150 from the Federation Account and selling at N40 and inflicting that loss on the federation.
“NNPC had also said that it is DPR
but for us in the CBN, every month NNPC sends report to the Federal Allocation
Account Committee. And every month NNPC indicates how much it has deducted as
PMS subsidy.
“From April 2012 to date, NNPC had
submitted reports to the FAAC consistently showing it is deducting nothing from
PMS, so we are surprised that having submitted nil returns since April 2012, we
are now being told that deductions were being made.
“I don’t know whether they were made
and whether the DPR had approved them. We are waiting for the reconciliation
with the PPPRA. The other part of the third party financing which were not
appropriated had no documentation or proof.”
Sanusi is ignorant — Yakubu
But taking up Sanusi on his
presentations, the Group Managing Director, NNPC, Andrew Yakubu, expressed
surprise over the CBN governor’s outburst. More so, as efforts were being made
to reconcile all the differences, even with the assistance of an audit firm of
high repute, saying the CBN governor was speaking from a point of ignorance.
Yakubu said: “We have made
submissions but this meeting was not of detailed discussion of the submission.
We came here for the Chairman to brief us on the programme and agenda on the
detailed reconciliation that we are doing.
“As you were told in the meeting we
are reconciling and are at the point of conclusion on the reconciliation
process with the various agencies. It is at the end of this that we will submit
our detailed reconciled position which the committee will study and then
commence detailed review. What is reported is exactly the true position of
things.
“As you are aware, the major chunk
of the amount in question – over 80 per cent of it is on subsidy for both PMS
and kerosene.
“The issues that were raised are not
new at all. You see we came out in details because we don’t have anything to
hide and we gave a detailed breakdown of the so called $49billion and we came
out clearly to state the various streams that are associated with what he was
talking about.
“Now, we also made it clear that
NPDC, if we had anything to hide, we would not have made it clear that NPDC was
part of the stream, because NPDC which is NNPC’s upstream operation, is a
limited liability company registered by the Companies and Allied Matters Act
(CAMA) to do upstream business just like any other independent company.
“Now, if you are in your business,
will you take your gross revenue and pass it on? What we simply said was to
account for the streams that the CBN governor erroneously captured.
“Now let me make this point very
clearly: CBN is a banking outfit, so I really, really understand why they will
not understand some petroleum engineering issues and they are not also an
auditing outfit.
“Now what they try to do is to audit and I heard some statements made here that they do not have this document, they don’t have that document. They are not the auditors. We have certified bodies and arms of agencies that are charged with the responsibility of auditing.
“Now what they try to do is to audit and I heard some statements made here that they do not have this document, they don’t have that document. They are not the auditors. We have certified bodies and arms of agencies that are charged with the responsibility of auditing.
“They are banking right? So what he
said was not really new. We said clearly that we stated an amount that went to
NPDC and that amount was the gross lifting.
“But there are other streams that go
back to government in terms of taxes just like any other business player. So we
have royalties, we have Petroleum Profit Tax and so on and so forth.
“Now these are subject of other
detailed discussions and investigations and they are open. We give access to
the Auditor General of the Federation, we give access to Accountant-General,
and we give access to agencies that have business to do with auditing of
our own business.
“At the Federation Account too, we
render this report as you are told on monthly basis and these are issues that
are subject of reconciliation on monthly basis.
“So really for issues like this to
come to the public glare again becomes worrisome that we throw away numbers, we
throw away allegations that at the end of the day we clarify but then the
damage would have been done.”
It will be recalled, that at a press
briefing held by the Minister of Finance and Coordinating Minister of the
Economy, Dr. Ngozi Okonjo-Iweala; the Minister of Petroleum Resources, Mrs.
Deziani Allison-Madueke; the Governor of Central Bank and heads of DPR and
FIRS,the initial figure of $49.8B was reconciled to $10.8B. On the same day, at
the Senate hearing the CBN gave a figure of $12B which was corrected by the
Coordinating Minister of the Economy to $10.8B.
While NNPC and other relevant
Government Agencies are in the process of reconciling the $10.8B as accepted by
all parties, we are surprised by the new $20B figure introduced by the CBN.
According to CBN the $20B is made up of $12B subsidy claim, $6B NPDC gross
revenue and $2B third party revenue. It is worthy to note that the CBN accepted
NNPC submission with respect to $16B royalty and PPT payments into the
federation Account through the FIRS. This indicates that the CBN cherry picks
the figures. For example in taking the entire $6B gross revenue accruable to
NPDC and allocating same to the federation account, CBN simply multiplied the
gross production by the crude oil price; thereby failing to account for the
operating costs (opex) and amortized capital expenditure that underpin the
production. In other words, the CBN failed to take into account the cost of
production.
We reiterate that NPDC has been
remitting the royalty and petroleum Profit Tax, PPT to the Federation
Account. NPDC as a subsidiary of NNPC operates a business model similar to
other international companies in Nigeria and abroad and will continue to be
governed by these global best practices in the execution of these assets.
Regarding the subsidy claim on
kerosene, it is important to note that NNPC as the supplier of last resort is
the only company supplying this product in Nigeria for the benefit of the
citizenry. If kerosene has been deregulated why are the independent marketers
not supplying this product in line with what is applicable to diesel (AGO).
NNPC owes a duty to Nigerians to ensurethat there are adequate products in the
country. This mandate has without question been accomplished in the past four
years. NNPC deserve to be commended rather than battered, for ensuring adequate
supply of kerosene at regulated price of N50.00k.NNPC cannot be held
responsible for any differential pricing from non NNPC retailers. This is the basis
for NNPC’s claim on kerosene subsidy.
At the end of the session, the
Committee’s chairman, however, granted one week’s grace requested by the
parties to reconcile all the differences and then bring all the necessary
documents to back up their claims.
Source:
vanguard news
By Emma Ujah, Clara Nwachukwu,
JOHNBOSCO AGBAKWURU, JOSEPH ERUNKE & CHRIS OCHAYI
