Missing $10.8bn: FAAC studying issues

nnpc03 February 2014, Abuja – Members of the Federation Account Allocation Committee (FAAC) are studying the issues surrounding the whereabout of the $10.8 billion the Nigerian National Petroleum Corporation (NNPC) was supposed to remit into the Federation Account.

Some commissioners of finance, who spoke with The Nation, said the matter was too politically charged for them to comment on. It however promised that its position would be made known soon.

One commissioner of finance from a Peoples Democratic Party (PDP) controlled state, declined to speak on the matter on the ground that he would like to spare both his state government and the Federal Government from further controversies.

Two finance commissioners from APC-controlled states also declined to speak on the matter and chose “to err on the side of caution”.

At a briefing last year, where it was revealed that $10.8 billion was not paid into the Federation Account and not $49.8 billion as alleged by the outgoing governor of the Central Bank of Nigeria (CBN) Sanusi Lamido Sanusi, the Minister of Finance Dr. Ngozi Okonjo-Iweala said her ministry and the FAAC were looking into the matter.

She reiterated this position during her 2014 budget presentation and almost gagged all parties involved from making further comments about the money until the ministry/FAAC meeting had worked on it.

Last year, Sanusi was said to have written a letter to President Goodluck Jonathan, alleging that $49.8 billion that was supposed to be paid into the account was missing.

However, Sanusi along with the ministers of Finance and Petroleum Resources addressed told reporters that the amount involved was no longer $49.8billion but $10.8 billion which was undergoing reconciliation by the agencies involved and FAAC.

NNPC said it incurred the $10.8billion expenditure ”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”.

While insisting that the fund is not missing, the NNPC added that $8.49billion subsidy claim for 2012 was part of the whole component $10.8billion because for many years the NNPC has been the main supplier of the subsidised Premium Motor Spirit (PMS).

The NNPC claimed that the Federal Government had not made payment to the corporation  in the name of subsidy during the period under review noting that ”pipeline management and repair cost is $1.22billion while product/crude oil losses is $0.72billion and cost of holding the strategic reserve stock is $.7billion”.

The corporation said ”as long as it is a transaction, it is always work in progress” and noted that the pipelines were constantly being hacked into and there is no budget from which the corporation can recover the cost.

According to the NNPC, “The Petroleum Products Pricing Regulatory Agency (PPPRA) offers a mechanism for which under the subsidy regime there is a certain claim to make from  importation or distribution of  petroleum products.

“However, that template does not have any recovery mechanism for pipelines. Everyone needs to be aware that pipelines are constantly being vandalised in Nigeria, and there is a constant cost of keeping those pipelines running are the cost we are reflecting here.”


– The Nation

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