A Review of the Nigerian Energy Industry

Unremitted fund: Utilisation of $10.8bn constitutional — NNPC

NNPC-Towers131 January 2014, Lagos — The Nigerian National Petroleum Corporation, NNPC, has insisted that the $10.8 billion (N1.73 trillion) it was accused of not remitting to the federation account is not missing.

It said its utilization of the fund was legal, backed by the law setting it up.

In a presentation to the media, Mr. Bernard Otti, Group Executive Director, Finance and Accounts, NNPC, said: “Contrary to what is being speculated, the $10.8 billion which is currently the subject of ongoing inter-agency reconciliation exercise is not missing.”

He said the fund was used in the payment of subsidy for petroleum products, maintenance of the strategic national reserve and for pipeline management and repairs.

He further disclosed that a significant component in the utilization of the fund is the cost incurred from keeping a portion of Nigeria’s strategic reserves on the country’s territorial waters, which together with the cost of keeping the reserves on land is put at $370 billion.

Otti noted that the decision to keep some of the strategic reserves on the waters, despite the huge cost associated with it, is as a result of pipeline vandalism which has made access to most of the inland storage facilities impossible.

He said as a law-abiding corporate entity NNPC’s processes and procedures are guided by the provisions of the law, adding that whatever expenditure it incurred in the discharge of its national responsibilities are backed by the law setting up the corporation.

$10.8bn not missing

He said: “Even at the risk of sounding repetitive, we like to state once again that contrary to what is being speculated, the $10.8 billion which is currently the subject of ongoing inter-agency reconciliation exercise is not missing.

“The sum in question has been expenditures incurred as part of statutory responsibilities which the NNPC as the national oil company executes on behalf of the Federal Government and by extension the entire people of Nigeria.”

Otti further stated that the NNPC, as the national oil company of the country, it is burdened with some onerous responsibilities that other oil companies are freed from.

According to him, the mandate of ensuring that the nation is wet with petroleum products round the clock rests solely on the corporation, adding that the NNPC is expected to discharge this duty irrespective of the prevailing international market conditions of crude and products.

Otti said: “It is also on record that for many years now, NNPC has been the main supplier of products to the nation. Most of these products are imported at international prices but sold at regulated prices. At some point, NNPC was the sole importer of products into the country.

“The corporation has successfully kept the nation wet with products, especially PMS, for the past three years as can be verified from the absence of queues at petrol stations during normal and festive seasons.”

– See more at: http://www.vanguardngr.com/2014/01/unremitted-fund-utilisation-10-8bn-constitutional-nnpc/#sthash.9Wy1EBdg.dpuf


– Vanguard

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