Finance Ministry,NNPC,CBN Contradict Selves At Senate Hearing Over Missing Funds

The Federal Government on Thursday said it would appoint independent forensic auditors to investigate transactions carried out in the oil and gas sector.
 
The auditors, according to the Minister of Finance, Dr. Ngozi Okonjo-Iweala, will examine the books of the Nigerian National Petroleum Corporation, Nigerian Petroleum Development Corporation as well as other government agencies operating in the oil and gas sector.
The move, she stated, would help to unravel the controversies surrounding the alleged unremitted $20bn oil revenue by the NNPC.
After she appeared before the Senate committee investigating the non-remittance of oil proceeds to the Federation Account, Okonjo-Iweala told journalists that since the $10.8bn had been accepted by all parties as the outstanding amount, an independent body would be appointed to investigate the financial transactions involving oil exports.
She said the technicalities involved in the audit of the sector as well as the special expertise needed to carry out the investigation informed the decision.
The minister said since conflicting figures were being mentioned by the Central Bank of Nigeria and the NNPC, the only way to establish the truth and reassure Nigerians was to set up an independent body to verify all claims made by the parties.
She said just like it was done during the fuel subsidy scam, the forensic audit would help to bring an end to the ongoing controversy.
The minister said going by the urgency involved in unravelling everything about the missing revenue, the auditors would be required to submit an interim report within one month.
Okonjo-Iweala said, “It should be emphasised that the issue of unremitted funds by the NNPC is not new; it has been an ongoing issue at every Federation Accounts Allocation Committee meeting chaired by the Ministry of Finance, as evidenced by reports from the monthly meetings.
“As of December 2013, the cumulative un-reconciled figure of shortfalls from NNPC payments stood at N1.792tn, or about $11bn.
“On the original $10.8bn, which was the shortfall we had as of July 2013, another reconciliation meeting was held at which NNPC presented data of how it utilised the balance of $10.8bn, namely: amount withheld for subsidy, $8.766bn; holding cost of strategic reserves, $0.4599bn; crude oil and product losses, $0.761bn; and pipeline management cost, $0.905bn, for a total of $10.89bn.
“The data presented were all certified by the PPPRA as being accepted. We asked to see the backup documentation to enable verification.
“Our judgment is that a proper examination of these documents requires technical expertise beyond the capacity of the reconciliation team, and, therefore, we believe we should have an independent forensic audit managed independently of these submissions.”
The CBN Governor, Mr. Lamido Sanusi, had insisted while appearing before the Senate Committee on Finance that the NNPC had yet to account for $20bn in oil sale proceeds and that the subsidy the corporation was removing on kerosene was illegal, null and void.
He said, “We established that the NNPC shipped about $67bn worth of crude and about $47bn came back to the Federation Account; so, there is $20bn unremitted. The finance minister had explained that there was $6bn that the NNPC said it shipped on behalf of the NPDC.
“There is the $2bn third party finance and the balance of $12bn from our books, and even from the NNPC submissions, it is what is outstanding from the domestic crude of $28bn that was exported by the Nigerian Petroleum Development Company.
“As far as the CBN is concerned, the most important point to establish is that there is a difference of $20bn between what the NNPC shipped and what it repatriated.
“We have presented documents from the PPPRA and the Presidency that, in our view, there is no subsidy on kerosene first of all, and that the payment of kerosene subsidy is a violation of a written presidential directive.”
Sanusi insisted that apart from the legal opinion being sought on the issue by the finance minister, he would also bring the CBN lawyers to come and defend its legal position in order to establish that what was paid to the federation was inaccurate.
He said the CBN made no comments on the $2bn third party documentation because it had been given no documents and that the $6bn for the NPDC did not come to any account in the CBN, but that the agency had taken the words of the NNPC.
However, the Minister of Petroleum Resources, Mrs. Deizani Alison-Madueke, defended the legality of the kerosene subsidy and maintained that there was no official gazette to stop its removal.
She said, “For years, the issue of the directive given by the late President Umaru Yar’Adua had been brought up over and over again. At the time, an inter-ministerial meeting was held with both the ministers of Finance and that of Petroleum and a decision was taken to stay action on the memo because kerosene was very crucial to Nigerians.
“The masses of Nigerians deal with it today. The landing cost is N150, but it was being subsidised and sold at N50.
“Because we cannot effectively move the products around the country because of the damage done to our facilities, the marketers took advantage of that more than others; so, bridging cost is added since the product is being moved around by road.”
She clarified that the GMD of NNPC at that time wrote two memos to the finance minister for clarification despite a presidential directive but no clarification came, hence the subsidy remained.
The Group Managing Director, NNPC, Mr. Andrew Yakubu, insisted that no money was missing and that the corporation had not received any subsidy payment for petroleum products supplied to the domestic market since 2012.
He said the N888.101bn and N971.138bn appropriated for that purpose in 2012 and 2013 were grossly inadequate to meet the payment obligations to both the NNPC and other marketers.
“This development led to the accumulation of $8.76bn as unpaid subsidy due to the NNPC for petroleum products supplied during the period under review. This amount comprised $5.25bn for PMS (petrol) and $3.51bn for DPK (kerosene),” he said.
The Chairman, Senate Committee on Fincance, Senator Ahmed Makarfi, said the committee would study the documents and submissions by the NNPC and that “our own forensic examination of the document will make us take a decision as to whether the documents support the expenses incurred.”
He said, “We have also received certification for kerosene subsidy but the key issue is the appropriation to it and we have all agreed here that no appropriation has been made for it.
“The implication of spending money that is not appropriated is well known to everybody and the whole world is hearing this. I don’t want us to joke or play with this. It is the most central issue.
“All agencies that have spoken have confirmed to the whole world that this money was not appropriated and I want people to absorb the import of this confirmation.
“We will deliberate on how to deal with the past, how we will deal with the future is critically important and this is the best time to deal with the issue to avoid further contravention.”

CKN NEWS

Chris Kehinde Nwandu is the Editor In Chief of CKNNEWS || He is a Law graduate and an Alumnus of Lagos State University, Lead City University Ibadan and Nigerian Institute Of Journalism || With over 2 decades practice in Journalism, PR and Advertising, he is a member of several Professional bodies within and outside Nigeria || Member: Institute Of Chartered Arbitrators ( UK ) || Member : Institute of Chartered Mediators And Conciliation || Member : Nigerian Institute Of Public Relations || Member : Advertising Practitioners Council of Nigeria || Fellow : Institute of Personality Development And Customer Relationship Management || Member and Chairman Board Of Trustees: Guild Of Professional Bloggers of Nigeria

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