A Review of the Nigerian Energy Industry

NNPC didn’t get N1.329tr subsidy money from CBN, says Alison-Madueke

18 March 2015, Lagos – Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, has denied that Nigerian National Petroleum Corporation, NNPC, received N1.329 trillion as subsidy payments between 2009-2011 from the Central Bank of Nigeria, CBN, as alleged by the ad-hoc committee of the House of Representatives on Subsidy Regime. –

Diezani Alison-Madueke, OPEC president

The committee report had alleged that “NNPC directly deducted N408.255 billion, in addition to the payment of N81.648 billion by CBN, in 2009; N407.801 billion, in addition to the payment of N402.423 billion by CBN, in 2010; and N847.942 billion, in addition to the payment of N844.944 billion by CBN, for 2011, contrary to Section 162 of the 1999 Constitution, as amended.”

The minister argued that this claim is “totally baseless, false and without foundation.”

Speaking with newsmen, Tuesday in Abuja, she explained that subsidy payments to NNPC are not based on cash remittance and, therefore, CBN could not have remitted any cash to NNPC for the purpose of subsidy.

… gives clarifications

According to her, “the mechanics of subsidy recovery by NNPC is non-fund based, but by way of credit to NNPC against domestic crude cost due. When approval certificates are received from Petroleum Products Pricing Regulatory Agency, PPPRA, their values are deducted from crude oil cost due in a given month after due consideration of what is approved.”

Alison-Madueke stated that “all such approvals and deductions are regularly copied to other relevant agencies of government such as Ministry of Finance, Office of the Accountant General of the Federation, Budget Office of the Federation, Federation Accounts Allocation Committee and Revenue Mobilization and Fiscal Allocation Commission.

“In the advice on subsidy deductions forwarded to the Ministry of Finance, NNPC always state that ‘in line with presidential directives, the ministry should authorize the Accountant General of the Federation to source for the approved subsidy amount and transfer same to the Federation Account for onward distribution by FAAC’.”

… flays Reps c’ttee

She condemned the committee for doing a shoddy job.

According to her, “it is grossly inaccurate and misleading for the ad-hoc committee to claim that NNPC made ‘double deduction’ by deducting subsidy at source and simultaneously receiving payment for the same purpose from CBN.

“The conclusion by the committee of double payments to NNPC obviously accounts for the erroneous and outrageous sum of N2,587.087 trillion as total subsidy payment for 2011 as stated in the committee’s report.”

NNPC, she noted, believes that the committee’s proceedings were very serious and important assignment for the purpose of “verifying and determining actual subsidy requirement” and put to rest the issue of subsidy once and for all.

She said: “It is unfortunate that the wild allegations, suppositions and conjectures, which form the basis of their conclusion, actually did more damage to the objectives than verify subsidy requirement.

“Furthermore, such reckless allegation is capable of inciting the public against the corporation and its personnel.”

The minister then demanded full disclosure on this allegation to set the records straight.

Alison-Madueke said: “In this context, the committee should disclose the source of their data and such source must disclose to the nation the demand note for the payment, the bank and account to which the amount was paid and the purpose for which the money was expended and by who.

“If this is not done, the story of subsidy in Nigeria would never be closed.”

– Vanguard

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