By Macson Obojemuinmoin
The Nigerian National Petroleum Company Limited (NNPC Ltd.) says it will continue to collaborate with the Nigeria Extractive Industries Transparency Initiative (NEITI) and all relevant stakeholders in the Reconciliation Committee set up by the Nigerian President, Bola Ahmed Tinubu, to investigate, review and reconcile the financial records on alleged indebtedness to the Federation by both NNPC Ltd. and the country’s Federation Accounts Allocation Committee, FAAC.
The state hydrocarbon firm states that the claims by an unnamed Non-Governmental Organisation (NGO) were baseless, “considering the fact that NEITI itself had dismissed many of the allegations in the said 2021 report, following a series of engagements with NNPC Ltd”.
The NNPC statement appeared to be referring to the allegations by the Socio-Economic Rights and Accountability Project (SERAP), a leading advocate of clean governance in the country, who had alleged that over $15Billion and another ₦200Billion were missing and unaccounted for between 2020 and 2021, fingering NNPC Ltd mostly for the ‘missing monies’ and urging Mr. Tinubu to set up a presidential panel of enquiry to probe the allegations contained in NEITI’s 2021 audit report.
SERAP contended that NEITI’s report indicted many government agencies, including the NNPC Ltd and the Nigerian Petroleum Development Company (NPDC), now renamed NNPC Exploration & Production Limited (NEPL) for failing to remit $13.591Million and $8.251Billion to the public treasury.
SERAP also stated; “The NNPC and (its operating subsidiary) NPDC failed to remit over 70% of these public funds. The organisation wants the NNPC and NPDC to be investigated and the missing public funds fully recovered”.
SERAP argued that “The report also shows that in 2021, the State Owned Enterprises (SOE) and its subsidiaries (the NNPC Group) reportedly spent $6.931Billion on behalf of the Federal Government but without appropriation by the National Assembly.
“The NNPC also reportedly obtained a loan of $3Billion in 2021 purportedly to settle subsidy payments due to petroleum product marketers, but there is no disclosure of the details of the loan, subsidy and the beneficiaries of the costs”.
NNPC Ltd’s response, released November 7, 2023, states that it was made “to sell Premium Motor Spirit (PMS) imported into the country at one-third of its value, at the outset of President Bola Ahmed Tinubu’s administration, a development that gave rise to an average of ₦400Billion monthly subsidy bill, which subsequently put a strain on its revenues and finances”.
The problem with this particular line of defence is that Tinubu’s inaugural statement effectively removed the subsidy, so NNPC could not “have been made to sell Premium Motor Spirit (PMS) imported into the country at one-third of its value, at the outset of President Bola Ahmed Tinubu’s administration”.
The press release by NNPC Ltd. further states, “that subsidy bill accumulated to up to ₦3.736Trillion as of May 31st, 2023.”
NNPC continued: “With respect to gas-to-power debts, the non-payment of NNPC Ltd.’s share of upstream joint venture gas supplied to the government-owned plants led to the accumulation of indebtedness of ₦174.07Billion by the Federation.
The state hydrocarbon firm declares that “the receivables due from the federation to NNPC Exploration & Production Limited (NEPL) as of 31st May 2023 amount to $712Million (equivalent to ₦309.07Billion at ₦434.08/US$1) for revenues not remitted to NEPL but paid into the Federation account.
“While the Federation owed NNPC Ltd. the sum of ₦4.207Trillion as net indebtedness, the Company was only indebted to the Federation in the sum of ₦2.852Trillion, made up mainly of outstanding Good and Valuable Consideration (GVC) in respect of government upstream divestments, royalties, and Petroleum Profit taxes (PPT)”, NNPC testifies.
In the press statement signed by Olufemi O. Soneye, its Chief Corporate Communications Officer, NNPC Ltd. notes that its book “remains open to all our stakeholders as we remain committed to delivering value to Nigerians with integrity and as espoused in our principles of Transparency, Accountability and Performance Excellence (TAPE)”.