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NNPC claiming Nigeria owes it N797 billion —NEITI

Mele Kyari

A report by the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the (Nigerian National Petroleum Corporation) NNPC, is claiming that Nigeria is oweing it N797 billion.

According to the report, NNPC made the claim after NEITI confronted the state oil company with the fact that it failed to remit N77.92 billion, being under-remittance by the corporation to the Federation Account from domestic crude oil allocation in 2017.

NEITI, in a statement on the release of the report of a pilot study on the sale of Nigeria’s share of crude oil and gas produced in 2017, further stated that the NNPC deducted N297 billion from total earnings from the domestic crude oil it statutorily allocates to itself, claiming the amount was for costs and losses.

“The sum of N77.92 billion was under-remitted by NNPC to the Federation Account from Domestic Crude Allocation in 2017. NNPC acknowledges the under-remittance and states that there is an ongoing reconciliation to net off the N77.92 billion from ‘the established Federation indebtedness to the Corporation of N797 billion, arising from KPMG forensic audit of the Corporation at the instance of the Federation,’” NEITI stated.

NEITI, in the statement signed by its Director, Communications and Advocacy, Dr. Orji Ogbonnaya Orji, further disclosed that total revenue from sale of the federation share of oil and gas for 2017 was $14.5 billion, comprising $13.18 billion or 90.8 per cent from crude oil and $1.32 billion or 9.1 per cent from gas.

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Breaking down the N297 billion total deductions, the report revealed that the NNPC claimed that N141.6 billion was for under-recovery on petroleum products (another name for fuel subsidy), N25 billion was for crude oil and petroleum products losses; while N130.4 billion was for pipeline repairs and maintenance.

Commenting on the report, the Executive Secretary of NEITI, Mr Waziri Adio, said the special report was undertaken in furtherance of the recent decision of the global Extractive Industries Transparency Initiative, EITI, to add commodity trading transparency to its scope of coverage through stand-alone and in-depth reports.

According to Adio, the objective, was to ensure that adequate returns to governments, increasing competition and efficiency in commodity trading, and ensuring greater public scrutiny of the resultant revenues.

He said: “Resource-rich countries receive shares of minerals produced in their territories as equity shares or as in-kind payments, and these minerals are usually sold directly or indirectly to commodity traders through state-owned enterprises.

“However, the process and details of these sales are mostly shrouded in secrecy, even when more than half of the revenues from the extractive sector come from these sales. This is why the EITI resolved to beam more search-light on commodity trading. Nigeria is one of the five EITI-implementing countries selected to pilot this enhanced focus.”

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Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.

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