NEC, FAAC approve use of $1.05bn NLNG dividends for subsidy

The National Economic Council (NEC) and Federation Accounts Allocation Committee (FAAC) approved the use of Nigeria Liquified Natural Gas dividends for financing petroleum products importation, News Agency of Nigeria (NAN) reports.

He said that the Group Managing Director of the NNPC, Dr Maikanti Baru, also briefed NEC and FAAC on the NLNG dividends, which was paid to the corporation as a major shareholder.

It will be recalled that the President of the Senate, Dr Bukola Saraki, had faulted the reported use of $1.05 billion, by the NNPC from its dividends from the NLNG for fuel subsidy.

Saraki expressed concern over Baru’s claim that the illegal diversion of dividends from the NLNG was done “in compliance with the National Assembly’s directive that NNPC as the supplier of last resort should, and has maintained robust petrol supply”.

According to the senate president, the money ought to be paid into the Consolidated Revenue Fund of the Federation for disbursement to the three tiers of government.

Another source, at the Central Bank of Nigeria (CBN), confirmed to NAN that NNPC had sourced 1.05 billion dollars, a revolving loan, to finance the importation of Premium Motor Spirit, known as petrol into the country in 2018.

He said that Section 7 of the NNPC Act empowers the NNPC to defray costs from its revenue.

He further explained that the NNPC had fully complied and had implemented the approved Treasury Single Account (TSA) laws in utilising the money, which was domiciled in CBN account.

According to the him, the fund is managed by inter-governmental agencies such as Ministry of Petroleum Resources, Ministry of Finance, Department of Petroleum Resources, Petroleum Equalisation Fund, among others.

He added that it was unfortunate for anybody to say NNPC had misappropriated the fund.

“There is nothing like 3.5 billion dollar subsidy claim; it is not true and it is also false alarm that the NNPC was mismanaging such account, the dividends of NLNG as we know is being properly managed,” he said.

Also, spokesperson of the NNPC, Mr Ndu Ughamadu, confirmed to NAN that the corporation operates a regime of under recovery, since it is only the National Assembly that could appropriate on fuel subsidy.

He said that the NNPC was a major shareholder of NLNG and the dividends of NLNG were paid into the corporation account, which the corporation manages.

“I want you to know that in this situation, there is nothing like subsidy payment as the Senate President had mentioned.

“The GMD had briefed both NEC and FAAC on this NLNG dividend; also you know that the National Assembly had asked the corporation to ensure adequate supply of products in the country.

“We used the 1.05 billion dollars revolving loan in question, to finance importation of product in the country,” he said.

Ughamadu noted that the corporation had addressed the Senator Ahmed Lawan-led Ad Hoc Committee on fuel importation and explained every details of its operations.