A Review of the Nigerian Energy Industry

Missing Fund: NNPC insists $30bn oil revenue remitted to Federation Account

NNPC Towers13 January 2013, Abuja – Following the controversy that trailed the controversial $49.8 billion missing from federation account, the  Nigerian National Petroleum Corporation, NNPC has disclosed that the disputed balance of $10.8 billion from the  original amount, which has not been paid into the Federation Account, is not missing but formed part of its operational costs within the period, January 2012 to July 2013, which was referred to by the Central Bank of Nigeria, CBN Governor, Sanusi Lamido Sanusi, in his letter to President Goodluck Jonathan on unremitted oil revenues.

In a statement issued by the Corporation’s General Manager, Media Relations, Dr. Omar Farouk Ibrahim, it insisted that issues surrounding the allegation of the unremitted $49.8 billion against it had since been explained, but it appears that the initial dust raised by Sanusi’s letter was yet to settle.

It explained that repairs on Nigeria’s 5,000 kilometres of petroleum pipeline network, which is constantly subjected to vandalism, unpaid subsidies on kerosene and petrol, as well as its maintenance of national strategic reserves for petroleum products, were all parts of its operational costs accounted for by the $10.8 billion.

According to Ibrahim, the Corporation considered it necessary to make further clarifications on the burning issue, considering the extant media reports on the same issue, which it considered as misleading.
“We are therefore constrained to respond and clarify the issues once again to help those who do not yet understand the clarification made earlier by the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, Minister of Petroleum Resources, Mrs.  Diezani Alison-Madueke, Governor of the Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi, and Group Managing Director of the NNPC, Mr. Andrew Yakubu, at a joint press conference which was widely reported in the media.

“For the avoidance of doubt, there was no where it was stated or admitted by any of the parties in the course of the press conference or anywhere else that the sum of $12 billion or $10.8 billion out of he alleged unremitted $49.8 billion was missing.
“The truth of the matter is that as at the time of the press conference, $30 billion of the alleged unremitted oil revenue had been reconciled by all the parties involved. Dr. Okonjo-Iweala did explain that the reconciliation was an ongoing process and that the balance of $10.8 billion was still being reconciled,” said the Corporation’s spokesperson.

”At no time did anybody, be it the Coordinating Minister for the Economy or the CBN governor say that the outstanding $10.8 billion was missing. It is simply curious how some sections of the media are not prepared to see the difference between the two positions – reconciliation in progress versus money missing. These two positions are simply not the same thing no matter the angle from which anyone chooses to see them.”

Giving a breakdown of NNPC’s operational expenses, which make up the $10.8 billion, Ibrahim said, having made that point, it is also pertinent to further clarify that NNPC as a national oil company is saddled with certain onerous responsibilities that other oil companies are free from.

”For instance, as the supplier of last resort, NNPC has the responsibility of ensuring that there is adequate supply of petroleum products whether the market is favourable or not.

“The yet to be reconciled $10.8 billion can be located in the expenses on some of the responsibilities, which the Corporation carries out on behalf of the federal government with respect to the domestic crude oil utilisation.
“One of such issues is the unpaid subsidy on kerosene and premium motor spirit (petrol). It would be recalled that Dr. Okonjo-Iweala was earlier in 2013 reported to have stated that she had not paid any subsidy on kerosene since she assumed office.

“The truth of the matter is that since 2007 when the late President Umaru Yar’Adua reviewed the prices of petroleum products, following the general strike in protest against the price hike by his predecessor, the issue of subsidy payment on kerosene was left hanging and NNPC was mandated to continue to sell the product at a subsidised rate of N50 per litre.

– See more at: http://www.vanguardngr.com/2014/01/missing-fund-nnpc-insists-30bn-oil-revenue-remitted-federation-account/#sthash.cezSFsf7.dpuf

– Emmanuel Elebeke, Vanguard

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