Govs accuse NNPC of fraud, probe subsidy, cash call payments

May 17th, 2018

*Want border petrol stations sealed

By Chesa Chesa

State governors have accused the Nigeria National Petroleum Corporation (NNPC) of suspiciously increasing the nation’s daily petrol consumption from about 30 million litres to 65 million litres, and demanded a thorough probe of oil subsidy payments from 2015 to date.

A delegation of the governors, led by the Chairman of the Nigeria Governors Forum (NGF) and governor of Zamfara State, Abdulaziz Yari, expressed their concerns to Vice-President Yemi Osinbajo during a meeting with him on Wednesday night at the Aso Rock Villa.

Also in attendance at the closed-door meeting were Governors Udom Emmanuel (Akwa Ibom), Godwin Obaseki (Edo), Seriake Dickson (Bayelsa), Nasir el-Rufai Kaduna, Simon Lalong (Plateau) and Atiku Bagudu (Kebbi).

There were also the Minister of Finance, Kemi Adeosun; Minister of National Planning, Udo Udoma; representative of the Group Managing Director of the NNPC, Maikanti Baru and some other top government officials.

Following NNPC’s excuse that the sudden hike in petrol consumption is due to illegal export to neighbouring countries, the governors demanded and secured approval that all petrol stations less than 10 kilometres to the nation’s borders be immediately sealed by the Department of Petroleum Resources (DPR), until they are recertified.

They also demanded that the NNPC must henceforth clearly differentiate its earnings in sales as against taxes, before remitting funds to the Federation Account, to avoid unexplained shortfalls.

The governors equally raised concerns over NNPC Joint Venture Cash Call claims and directed that further payments for such should be suspended until the corporation gives details of exactly how much has been paid since 2015.

Emerging from the meeting, Zamfara Governor spoke to State House correspondents, and said “this is the second time we are meeting with NNPC in respect of remittances into the Federation Account.

“Governors and the federal government are not satisfied with the way remittances are being made because there are so many questions raised on Nigeria, more especially on the 425,000 barrel domestic and 180,000 barrel component of Nigeria from the Joint Venture Partners.

“We met last week, we and the NNPC came briefed our chairman of the National Economic Council. We raised three issues, one of which is the issue of royalties.

“For each and every barrel taken out of the country there were either 17 or 24 percent royalty and 17 or 20 percent tax. So, our main concern is that the Department of Petroleum Resources (DPR) said that the NNPC is not remitting anything as royalty.

“What they do is that they transmit direct from the NNPC to the Federation Account, which is not allowed by law. According the law that established DPR, Section 196 of the Act said all the royalties should be paid to DPR and then transmitted to the Federation Account, which is not being done.

“So, we discussed today and we have sorted those ones out. The NNPC will not transmit to Federation Account except with clear distinction that this amount is for royalty and X amount is for taxes, and X amount is profits from the sales. So we achieved that.

“At the same time, NNPC is making payment on behalf of Nigeria on Cash-Call contributions and also the NNPC is making payment of cash call arrears of Nigeria’s contributions.

“But, our main concern is that in 2015, they said about $16.8 billion which is outstanding was not paid by the last administration and they negotiated it down to $5.1 billion, according to them.

“What we said specifically is that they should bring to us how much they have paid from 2015 to date and what is outstanding. And we directed them to stop further payments until the claims are proven and then we can give further directives. That too was achieved.

“On the issue of cost recovery, otherwise called subsidy, it resurfaced again after the efforts of Mr. President. Before now, oil was $40 per barrel; now, it is about $78 a barrel. Therefore, they are depending largely on importation. So, the cost is higher than what they are selling at the filling station and they need more money.

“When there was no cost recovery, the NNPC clearly gave us the number of 33 and 35 million liters per day as the consumption of Nigeria. But now with the new regime of cost recovery, NNPC is claiming daily consumption of 60 and 65 million liters per day, which we rejected and said no.

“So many of our international partners are saying that even if we are feeding Nigeria, Cameroon, Ghana and Niger, we cannot consume more than 35 million liters per day. So we are wondering where the 60 million liters is coming from. So, we are trying to sort that one out.

“Because our borders are porous, we took the decision that any filling station that is 10 kilometers to the border should be closed by DPR. And, we will do recertification according to the needs.

“Secondly, we have directed the Minister of Finance in collaboration with the DPR and the NNPC to use tracking devices on every truck in order to monitor where they are discharging the fuel, because we are suspicious of the number. We cannot confirm the difference from 30 million liters per day consumption to 60 and 65 million litres per day consumption”.

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