The minister of petroleum resources, Mrs. Diezani Alison-Madueke,? has stated? that the Nigerian National? Petroleum? Corporation (NNPC) is not above the law and does not perceive itself as such. Alison–Madueke stated this yesterday while responding? to a question put to her at the last day of the investigative hearing? by the House of Representatives Joint Committees on Finance, Petroleum (Upstream), Petroleum (Downstream) and Gas Resources over? NNPC’s alleged N450 billion? indebtedness to the Federation Account.
The minister also denied insinuations to the effect that parastatals under her supervision were operating above the constitution, insisting that nothing in their operations, as far as she knows, runs counter to the law.
In a full presentation at the public hearing, the petroleum minister explained that the N450bn indebtedness came about on the grounds that the NNPC was operating at a loss, buying crude oil at international prices and being made to sell refined products at much lower rates.
Alison-Madueke also used the platform to dispute figures earlier presented by the Executive Secretary of the Nigerian Extractive Industry Transparency Initiative (NEITI), Mrs. Zainab Ahmed, to the effect that the actual indebtedness of the NNPC to the Federation Account was N842 billion, insisting that the actual figure was N450 billion, and that the NNPC had started paying on instalment basis.
Her position was corroborated by the Minister of State for Finance, Dr. Yerima Ngama, who, in his presentation at the hearing, said the figure quoted by the NEITI boss was wrong. He then reeled out what he called the actual figure on monthly basis, incurred between 2005 and 2008.
He, however, challenged the NEITI boss to give a breakdown of the new figure she presented, on a monthly basis, to help the committee get to the root of the matter.
Ngama also said that between 2001 and September 2011, the NNPC had contributed over N11.4 trillion to the Federation Account, insisting that it was wrong to address the N450 billion as debt but a reprieve.
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The NEITI boss also drew the ire of the chairman of the joint-committee investigating the alleged indebtedness, Hon. Abdulmumin Jibrin, when she said that figures she presented were only based on audit conducted by her office in 2008, and that she had not been able to audit the NNPC since then. The chairman told her the act that established NEITI requires the audit to be carried out annually, and she promised to get it done by the third quarter of 2012.
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The hearing? was marred by rowdiness by the lawmakers just as the session was plunged into a momentary pandemonium which resulted into name calling when one of the co-chairmen of the committee, chairman of Petroleum Upstream, Hon Muraina Ajibola made enquiries from the NEITI boss that doubted the credibility of her presentation.
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But he was interrupted by ‘Point of Order’ by members who raised objection that there was no need for such questions and when Hon. Ajibola, rather than refrain from the questions, warned members of the panel to be careful and mindful of the past, the development angered more members who shouted ‘Point of Order, Point of Order’ and began to stage a walk out.
Not even the intervention of Hon Jibrin who tried unsuccessfully to calm members could return sanity to the hearing and it took the arrival of the deputy minority leader, Hon Suleiman Kawu Sumaila,? who was delegated by the leadership of the House to restore order, for the members to stop yelling.
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Addressing the Joint committee, Allison Madueke further informed the lawmakers? that NNPC used the money in question to augment differences in cost of purchasing crude oil in international market and the price of selling in a controlled market in Nigeria.
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Going further, she said the NNPC did? not operate like a government department and could not? therefore, subject its budget to the legislature for appropriation.
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She said, “The oil and gas industry is highly capitalised, and it cannot be run on government Appropriation. Let members know that NNPC is not subject to the Consolidation Revenue.? A national oil company like NNPC cannot depend on Federal Government appropriated budget.”
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In his presentation, the group managing director of the NNPC, Engr. Austin Oniwon denied allegations by RMAFC and NEITI that the corporation owed any money to the federation account.
Oniwon said what has become generally known as N450 billion debt was a deduction made by the corporation of funds expended to subsidise the price of domestic crude oil.
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He said, “The NNPC didn’t seek any loan nor obtained any loan for this purpose.
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“We didn’t withhold remittance to the f
ederation account, we didn’t even admit willingly to owing any money. It was a reimbursement of the payment the corporation made on subsidies which it has been arm-twisted into reaching an agreement with FAAC to repay in order to allow peace to reign in the country.”
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Commenting on allegations by NEITI that the corporation owed N842 billion as against the N450billion stated by RMAFC, the GMD said that it was a misrepresentation of facts even as he added that the allegation that the corporation uses different exchange rates to pay the federal government account was false.
He explained that the only deductions they made were in consonance with the extant law passed by “the National Assembly that empowers it to deduct less from domestic crude oil sales”.
Speaking on the failure to submit a budget for subsidies, Oniwon said he was “not in a position to discuss the budget subsidy issue” since it was not under his purview.
The GMD said the debt build up was generated by the impact of the lopsidedness of the pricing of crude oil in international and domestic markets as the funds were used to augment high cost of oil before it was sold in the domestic market.
He also debunked the allegation that about N12 billion was kept back by NNPC on the differential conversion of exchange rate on payment for domestic crude oil as alleged by NEITI and pleaded with the committee to use all available means within its powers to unravel the mystery surrounding the N12 billion difference.
Ngama also said that the NNPC Corporation could not be subjected to usual legislative processes and Appropriation by the National Assembly.
“The difference between NNPC transfer and that of other revenue collecting agencies is that NNPC determines the amount to be transferred to federation account through its mandates. The other agencies are not required to submit any mandate before CBN transfers funds from their respective pool accounts to the federation account.”
In its submission, the Petroleum Products Pricing Regulatory Agency (PPPRA) disclosed a total sum of N3,613,628,377,549.65 subsidy under recovery, out of which the sum of N2,115,977,448,734.12 (59 percent) was paid to NNPC between 2006 and August 2011 while the sum of N1,497,650,928,815.52 (or 41 percent) was paid to other marketers between 2006 and October 2011.
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According to PPPRA, the under recovery is calculated as the difference between landing cost and the government approved ex-depot in respect of volume imported while the volume is determined based on quantity discharged as witnessed by relevant agencies (PPPRA, DPR, Customs, Navy, Independent cargo inspector and government approved auditors.)
He regretted that the allegations had dented the image of the corporation before their business associates and the international community who were now expressing doubt on their credibility.
Closing the session, Hon. Jibrin and other co-chairmen said that the committee was not out to witch-hunt anybody or organisation with the probe but to get into the root of the matter.
Jibrin said that the committee would take time to study the documents presented by the NNPC after which they would? be invited back at a later date, after Sallah, to face the committee.
Meanwhile, the committee chairman on Petroleum Downstream, Hon Peterside Dakuku yesterday explained the postponement of the much publicised public hearing on government plan to remove fuel subsidy.
According to him,? the postponement was as result of the absence of lead speakers and other major stakeholders who were in the United Arab Emirate [UAE] for the International Bar Conference .
In a related development, the Senate probe into the management of the fuel subsidy fund ran into a hitch yesterday as officials of the NNPC, Department of Petroleum Resources (DPR), Nigeria Ports Authority (NPA) and the Central Bank of Nigeria (CBN) failed to honour their invitation
Other federal government agencies that also failed to honour the invitation by the Senate joint committee on the investigation of the management of fuel subsidy included Petroleum Product Pricing and Regulatory Agency (PPPRA), Nigeria Customs Service, and the chief of naval staff, Vice Admiral? Sa’ad Ibrahim.
Only the minister of finance, Mrs. Ngozi Okonjo-Iweala, honoured the invitation.