22 February 2017, Abuja – The Nigerian National Petroleum Corporation (NNPC) tuesday gave reasons why it was owing the federal government N23.4 billion in respect of fees chargeable on crude oil and gas exports since 2008, under the Nigerian Export Supervision Scheme (NESS).
NNPC said it accumulated the sum because the National Assembly imposed budgetary appropriation constraints of N20 million on it for the NESS fees.
NESS fees are payments due to pre-shipment inspection agents and monitoring and evaluation agents in respect of their supervision of crude oil and gas exports.
It usually leads to the generation of a Clean Certificate of Inspections (CCI) to an exporter as permit to execute action and agreed on at the end of each reconciliation and sign off by stakeholders.
According to a statement from the Group General Manager, Public Affairs of NNPC, Ndu Ughamadu, in Abuja, the corporation’s Group Managing Director, Dr. Maikanti Baru, made this clarification at a public hearing of the Senate Joint Committees of Finance, Trade and Investment, Gas, Petroleum Upstream, Banking, Insurance and other Financial Institutions, Judiciary, Human Rights and Legal Matters, and Customs and Excise.
Baru was reportedly represented by the Managing Director, NNPC Capital, Mr. Godwin Okonkwo, at the one-day investigative public hearing on the pre-shipment inspection of export activities in Nigeria at the National Assembly.
He stated that the National Assembly had always budgeted N20 million for NESS fees for the corporation and that NNPC lacked any legal right to remit any amount above the appropriated sum once it was exhausted.
Baru also explained that NNPC was normally charged 0.15 per cent Free On Board (FOB) value of export as NESS fees for its execution of export of crude oil and gas on behalf of the federal government. The statement equally contained the remarks of the Senate President, Senator Bukola Saraki, who said while declaring open the public hearing that the Senate was committed to taking steps that would promote transparency and accountability of all public and private institutions that transact business with or on behalf of the federal government.
Represented by the Senate Majority Leader, Senator Ahmed Lawan, Saraki noted that Nigeria was facing a lot of challenges and if the country was good for business, then its laws must be obeyed.
It also quoted the Joint Committee Chairman, Senator John Enoh, to have said the investigative public hearing was to instill probity and transparency in the process of crude oil and gas exports in order to reduce leakages.
Enoh stated that Section 11 of the Pre-shipment Inspection of Export Act made provision for repatriation of proceeds after 90 days, however, most exporters of crude oil and gas contravened the provision.
The federal government enacted the Pre-shipment Inspection of Export Act No. 10 of 1996 to ensure the exportation of quality goods through inspection of all export products, which gave rise to the Nigerian Export Supervision Scheme (NESS). Its responsibility was extended to cover crude oil and gas exports in 2008.