The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has accused the Nigeria National Petroleum Corporation (NNPC) of operating secret accounts, which are not being monitored by the relevant agencies as required by law.
Chairman of RMAFC, Engr. Elias Nbam made the allegations at the resumed investigative hearing of the House of Representatives into the non-remittance of N450 billion into the Federation Account by the NNPC.
The chairman further disclosed that RMAFC has discovered illegal deduction of the sum of N1.079 trillion for fuel subsidy by NNPC and the oil marketers under the Petroleum Products Pricing Regulatory Agency (PPPRA) between January and September 2011.
He said “At present, the three J.P. Morgan Accounts, where the payments for export crude oil and gas paid are not largely being supervised and constitutionally monitored by the major stakeholders of the Federation Account, particularly RMAFC. This situation makes the operation of the accounts to be shrouded in secrecy and therefore, subject of several criticisms, suspicion and lack of confidence by all stakeholders.
“The operation of NNPC’s domestic crude oil and gas account does not promote transparency and accountability. Indeed, NNPC pays revenue from its domestic crude oil and gas into its operational accounts and subsequently directs the Central Bank of Nigeria to transfer specific amounts to the Federation Account.”
On the illegal subsidy deductions, he said “by the Appropriation Act 2011, the NNPC is to be paid N81.720 billion from January-September 2011. However, the NNPC has so far deducted N615.670 billion, which shows a difference of over N533.950 billion.
“Similarly, the PPPRA marketers’ subsidy provides N102.753 billion as Appropriation for subsidy in the 2011 budget for the period January-September 2011 but by September 2011, the PPPRA (Marketers’ subsidy) has been paid N647,660 billion, which shows a difference of over N544.907 billion,” he said.
He added that from the N1,391,348,936,859.05 revenue realized by NNPC, the sum of N868,572,586,402.06 was remitted to the federation account while N450,776,350,456.99 was withheld by the Corporation between February 2005 and December 2008.
“Signature Bonus which is a premium from concession granted on oil Blocks are currently not being paid into the Federation Account. Such fund ought to have been paid into the Federation Account.
“From 2004 till date, dividends accruing from the Nigerian Liquefied Natural Gas Limited have not been paid into the Federation Account, the accrued dividends should be paid accordingly,” he stated.
According to him, “the Commission after the analysis of the revenue loss to the federation account due to the exchange rate differential discovered that the sum of N12 billion was the exchange rate differential for the period of January to August 2011, but noted that NNPC has so far paid the sum of N15, 234,862,500 on two installment into the federation account.
He noted that the ineffective functioning of the nation’s refineries led to the sale of most of the 445,000 barrel per day of crude oil allocated to NNPC and that the dollar realized is monetized into naira and paid into the federation account after NNPC had deducted its claims for subsidy.
But countering the allegation, Minister of State for Finance, Yerima Ngama, argued that the RMFAC boss did not request for details of the crude oil account from his office.
Hon. Aminu Shehu Shagari, member of the committee also alleged that Nigerian National Petroleum Corporation (NNPC) under Funsho Kupolokun, former NNPC Group Managing Director did not remit revenue generated from liquefied gas into the federation account as provided by the Constitution.
GMD of NNPC, Austen Oniwon said that the corporation was under duress to pay the sum of N450 billion and that when the situation improves it would revisit the first payment, just as he denied that the corporation is owing the country.
While responding to questions on the allegation, Tunde Lemo, CBN Deputy Governor confirmed the proceeds from the sale of crude oil are lodged with accounts domiciled J.P Morgan and managed by the apex bank.
He however noted that the CBN determines the exchange rate at which NNPC converts the dollar generated from the sale of crude oil, stressing that the exchange rate was not manufactured as claimed by RMFAC.
Lemo further explained that the deductions made from the account being managed “are related to subsidy” adding that CBN has no power to stop NNPC from making deductions.
“As far as we are concerned the procedures are followed. There is direct lodgement into J.P Morgan account whenever the crude is sold. We manage that account according to the mandate and we don’t have any reason to say otherwise,” he stated.
Meanwhile, in her presentation, the Executive Chairman of FIRS, Mrs. Omoigui-Okauru, who has been under fire from the Presidency following her submission on the contentious fuel subsidy removal has said that the NNPC does not pay taxes to the federal government.
Omoigui, when pressed further by lawmakers on when the corporation stopped paying taxes said she did not have the records available immediately but submitted that the NNPC was preparing its tax returns until a ministerial order made it stop practice.
She promised to provide details to lawmakers at a later date.
The NNPC has often been criticized for conducting its operations in secrecy. The state-owned oil corporation has also been accused of swimming in monumental corruption in its oil dealings, leaving the Nigerian state shortchanged in the process.###
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