A Review of the Nigerian Energy Industry

APC govs tackle NNPC over fedaral allocations

oshiomhole08 October 2013, Abuja – All Progressive Congress, APC, governors Monday, rose stoutly against the move by the Nigerian National Petroleum Corporation, NNPC, to shrug off the fact that it was indebted to the Federal Government to the tune of N2.3 trillion of unremitted revenue.

The debt, according to the governors, has effectively stalled the payment of monthly allocations to the 36 states since July this year, leading to a near stalemate between them and the Federal Government.

The governors, who made their position known in a statement in Abuja yesterday, challenged the corporation to make public the amount of money it generated and remitted to the federal purse since the beginning of the year.

The governors noted with dismay the attempt by the agency to treat the issue of transparent accountability in oil production with levity, warning that the opaqueness in the sector would further erode the confidence of the international community and Nigerians.

NNPC had said on Sunday that it did not owe the Federation Accounts and Allocation Committee, FAAC, any amount, having been consistently remitting its revenues to the relevant agencies of the government.

The spokesperson for the NNPC, Tumini Green, had claimed that “NNPC does not owe the Federation Account, “taking into account outstanding subsidies and other associated costs of operations and losses”.

Green, however, admitted that “not all revenues collected by NNPC are paid directly into the accounts of Federal Allocation with the Central Bank of Nigeria.

“Some are paid into the accounts of the relevant government agencies, like the Federal Inland Revenue Services and the Department of Petroleum Resources, with the CBN. But eventually, all these payments are credited to the accounts FAAC.”

But the governors described the claim by the corporation as escapist, dishonest, contradictory and in many respect fraudulent.

“The question is how much was the revenue collected by NNPC? How much of it was paid to the Federation Account? How much was paid to accounts of other relevant government agencies? How much is credited to FAAC? How much was committed to the payment of so-called outstanding subsidies? What other associated costs of operations and losses incurred and how much?

“Above all, what is the constitutional and legal provisions governing the management of oil revenue? Section 162(1) of the 1999 Constitution is unambiguously clear and it has directed that “The Federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.

“Nowhere in the Constitution has any exception been granted for any collectible revenue outside “proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja” provided.”

“If any other law has empowered the NNPC or any other government body to do otherwise, it is contradictory and to that extent, null and void.

The governors challenged the NNPC to address the nation on how much it realised as oil revenue for each month of the year, how much was paid into any government account, how much has been used to “settle the so-called outstanding subsidy payments and what are the other associated cost of operations and losses incurred.”

The state chief executives insisted that the problems of accountability and arbitrary management of oil revenue by the NNPC was at the centre of the current FAAC dispute.

While inviting Mr. President to urgently intervene in the matter to protect the image of the Federal Government and safeguard the provisions of the 1999 Constitution, the governors also asked him to call the NNPC and the Ministry of Finance to order.

The governors also called on the National Assembly to urgently take steps to protect the sanctity of the 1999 Nigerian Constitution by penalising those who tamper with national revenue under any guise.

It will be recalled that due to what the Finance Ministry calls shortfall in revenue collection, the Federal Government has not been able to remit monthly allocations in full to states since July this year. The situation has led to a strain in relationship between them.

– Vanguard

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