The Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, along with the Governor of the Central Bank of Nigeria, Godwin Emefiele, have been summoned by the House of Representatives over non-remittance of $19.25bn (approximately N3.24tn) revenue that accrued from sales of crude oil in 2014.
Mr. Wole Oke, Chairman of the House Committee on Public Accounts, gave the summons based on audit queries issued by the Office of the Auditor General of the Federation, OAGF, for the period.
The committee had penultimate week accused the NNPC GMD of refusing to respond to an audit query issued against the corporation over alleged illegal withdrawals from the Nigerian Liquefied Natural Gas Limited’s Dividends Account, totalling of $20.3bn.
Kyari, who has yet to appear before the lawmakers on the NLNG matter, had denied the allegation elsewhere.
The OAuGF, in its report for 2014, said from the examination of NNPC mandates to the CBN on Domestic Crude Oil Sales and Reconciliation in the Statement of Technical Committee of Federation Account Allocation Committee meeting held in January 2014, it showed that ‘a total sum of N3,234,577,666,791.35 was not remitted to the Federation Account by NNPC within the period under review.”
“Cost estimated for crude and product losses was N55,964,682,158.99, which is about 50 per cent of pipeline management cost of N110,402,541,010.88. Names of contractors, location and amount paid to each for the pipeline maintenance were not sighted for audit verification.
“Over 31 per cent – N826,506,271,231.26 – divided by N2,636,390,514,777.18 multiply by 100 per cent – of the realised crude sales for the year were earmarked as other expenses, apart from direct cost of production stated in NNPC reports for the year 2014. The breakdown of other expenses was not provided for audit.
“From the above analysis, it means that the Federation Account is losing 31 per cent (N826,506,271,231.26) being additional estimated cost from the total amount that should have accrue to Federation Account.”
The auditor-general added, “From the total revenue of N3,234,577,666,791.35 as at 14th January, 2015, payable to the Federation Account by NNPC during the year, the corporation deducted the sum of N826,506,271,231.26, i.e. N660,139,048,061.39, N55,964,682,158.99 and N110,402,541,010.88, for subsidy estimate, crude and product losses and pipeline management cost, respectively, at source thereby resulting to net amount withheld figure of N2,408,041,395,560.33 shown in the above table to the Federation Account.
“All these deductions at source by NNPC were not approved by FAAC.”
The OAuGF, therefore, requested the Accountant General of the Federation to inform the NNPC’s GMD to explain the flagrant withholding of domestic crude oil sales revenue by the corporation.
According to the auditor, there has been no positive response on similar issues raised in 2012.
The accountant-general consequently asked the GMD of NNPC to ‘provide names of the contractors, location, amount paid, to each for the pipeline maintenance for verification and the process being used by PPPRA for the repayment of subsidy to the oil marketers should be used for NNPC instead of the latter deducting the subsidy at source.”
The office also declared that deduction at source by NNPC must stop ‘henceforth as this is a contravention of Section 162(1) of the 1999 Constitution, which stipulates that ‘all revenue proceeds should be paid to the Federation Account’.
While the committee reviewed the response of the accountant-general, Oke and members of the panel insisted that the NNPC and CBN bosses should cause appearance in persons, as the accountant-general could not provide sufficient evidence on the audit query of such magnitude.
In a related development, Kyari is also expected to respond to other audit queries, including subsidy payments totalling N248.27bn which were not budgeted for in the 2014 Appropriation Act.
