The Senate Committee on Public Accounts and the Head of Finance of the National Petroleum Corporation (NNPC) on Tuesday engaged each other in a heated debate over the Auditor-General of the Federation’s report.
The report claimed that over N4 trillion derivative of oil transaction was not remitted into the Federation Account in 2016, thereby constituted an infraction on the nation’s laws, according to the audit query.
But the NNPC’s Chief Financing Officer, Umar Ajiya who spoke under oath disputed the figure, saying, government has been battling with the fuel subsidy which he disclosed, gulped N4 trillion.
The Chief Financing Officer acknowledged that, fuel subsidy, though, unintended by the present administration, has become an issue of confusion, which according to him, discussion was still ongoing in the last six years on how to handle the implication of sustained subsidy.
Umar’s reaction was as a result of query by the Auditor General of the Federation over alleged unremitted N4 trillion which, though, reflected in the records of crude oil transaction, was not in the Federation Account.
The Senate Committee on Public Accounts upon the scrutiny of the report interrogated NNPC at the investigation hearing that neither the Group Managing Director, Mele Kyari nor the Minister of State for Petroleum Resources, Timiprieye Silver was around.
At the instace of the Vice Chairman, Senate Committee on Public Account, Senator Ibrahim Hadejia, who presided over the hearing on behalf of the Chairman, Senator Mathew Uhroghide, Auditor General’s query was laid bare and read by Olutoye Agesin which stated: “It was observed upon scrutiny of NNPC report to the Technical Sub- Committee of Federation Account Allocation Committee meeting held in December 2016 that a cumulative total of N4,076,548,336,749.75 remained unremitted to the Federation Account by NNPC as at 31st December 2016.
“The total revenue unremitted as at 1st January 2016 (see the table above) from amounts payable into the Federation Account by NNPC was N3,878,955,039,855.73 was.
“The sum of N1,198,138,355,860.30 was due in revenue to the Federation Account out of the total generated in 2016, however, NNPC paid the sum of N1,000,545,058,966.20
resulting in an amount withheld of N197,593,296,894.02.
“This brought the total amount withheld by NNPC from the Federation Account as at 31 December 2016.”
Auditor General, therefore, ordered the GMD of NNPC to remit all amounts due to the federation account, improve on the record of remittances of proceeds to the federation account and pay interest on the amount unremmitted.
NNPC’s Umar who was obviously uncomfortable said:
“This has to do with the domestic crude that the NNPC takes in order to refine and sell products or takes to exchange and bring product into the country and side by side the Government has also fixed the price for PMS and that entails the accumulation of subsidy. “This issue has been reoccurring for years even now it’s a topical issue in the Government circles, a lot of consultations are ongoing because at the moment there is also more or less an implied subsidy as a result of the local consumption.
“What has happened in the past is that NNPC based on appropriation, and also appropriation for pipeline and security cost and maintenance had been deducting these sums before remitting balances to the Federation account.
“It became a turbulent issue to the extent the Governors also got involved and they commission forensic audit by PPMC. The forensic audit has been done, the auditor general has a copy of the forensic audit.
“At the end of the day that forensic audit established that NNPC was owing about N797 billion, but also on the other hand the federation was also owing NNPC, the net effect was that the NNPC was being owed N239 billion, so there is nothing like N4tr withheld by NNPC.”
He said the books are with the CBN, adding that they can’t hide N4tr anywhere.
Senators who are also members of the committee wondered how the NNPC would just wave off the weighty allegation.
Senator Ayo Akinyerule said the question by the auditor general is clear saying the answer to the query should be backed by documents
“Is that the response you can give to these questions fir those of us who are not part of your management? Only two lines response is not adequate for this committee.
“We expect you to provide details as subsidy payments, pipeline repairs and management of crude oil and arrive at a figure whether NNPC is owing or it is federation account that is owing. This answer is not acceptable.
“We believe you should take us seriously at this end there should have been proper computations on how they arrived at the N4tr and your defense to nollify it is not available to this committee.
The Deputy Chairman in his concluding remarks stepped down the query and asked him one week for the NNPC to supply documents to back his response.
