Corporation denies failing to remit N3.2trn to govt in 2014

dimeji akinloye

March 16, 2016 7:53 PM

The auditor-general, Samuel Ukura, had revealed series of financial discrepancies in the NNPC in 2014, saying domestic crude oil sales were under-remitted.

Ibe kachikwu, MD, NNPC

The

In the 2014 audit report of the Integrated Payroll and Personnel Information System (IPPIS) submitted to the National Assembly on Monday, March 14, the auditor-general, Samuel Ukura, had revealed series of financial discrepancies in NNPC, saying domestic crude oil sales were under-remitted to the federation account.

Responding to Ukura's claims, the group executive director and chief financial officer of NNPC, Isiaka Abdulrazaq, said it may have been a misunderstanding "of how revenues from crude oil and gas sales are remitted into the federation account.”

“The Auditor General of the Federation (AuGF) declared to the National Assembly on the 14th of March 2016 that NNPC has failed to remit the sum of N3.235 trillion to the Federation Account for the period ended 31st December 2014,” the statement released on Wednesday, March 16, said.

“NNPC wishes to state in strong terms that the AuGF’s declaration is erroneous. It should also be noted that although this period is before the new NNPC management was appointed in August 2015, the management still deems it fit and important to correct any misinformation about the activities of the corporation as this will adversely affect its current and future financial and operational plans if not corrected.”

The statement added that the proceeds from the sale of crude oil “are remitted to the federation account after deducting the cost associated with the supply and distribution”.

Abdulrazaq said the cost incurred include subsidy, crude oil and petroleum product losses, pipeline repairs and maintenance cost.

“The total amount of subsidy that have been approved and certified by PPPRA for the period of January 2012 to December 2014 was N2.34trillion. An additional N7.96Billion subsidy claim is still under reconciliation.

“Losses from crude oil and petroleum products as a result of vandalism on its network of pipelines for the period of January 2012 to December 2014 were N202.68Billion.

“Petroleum Product Strategic Holding Cost and Pipeline Repairs and Maintenance Cost for the period of January 2012 to December 2014 amounted to N358.88Billion.

“Consequently, the figure owed to the Federation Account as at January 2015 Federation Account Allocation Committee (FAAC) meeting report was N326,142,137,205.79…not the N3.23Trillion alleged by the AuGF,” he clarified.

Abdulrazaq further said when the new management of the NNPC was appointed, it identified all legacy claims issues between NNPC and the federation and engaged with the federal ministry of finance to resolve the issues by inviting the appointed forensic auditors to conclude the previous forensic audits on these claims. He said the final report is which expected soon.

dimeji akinloye