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Governors accuse NNPC of fraudulent subsidy payment

Governors accuse NNPC of fraudulent subsidy payment

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State governors have accused the Nigerian National Petroleum Corporation (NNPC) of fraudulently doubling the nation’s daily petrol consumption from about 30 million to 60 million litres.

The governors made this known on Wednesday after a delegation led by Abdulaziz Yari, chairman of the Nigerian Governors’ Forum (NGF) and governor of Zamfara state, met with Vice-President Yemi Osinbajo at the presidential villa in Abuja.

At the meeting, the governors demanded a thorough probe of oil subsidy payments from 2015 to date, while they demanded that all petrol stations less than 10 kilometres to the nation’s borders be immediately shut.

This followed NNPC’s excuse that the sudden hike in petrol consumption is due to illegal export to neighbouring countries.

As part of their demands, all trucks transporting petroleum products must have tracking device installed in order to monitor their movement to discharge stations and that NNPC must henceforth clearly differentiate its earnings in sales as against taxes before remitting funds to the federation account to avoid unexplained shortfalls.

In attendance at the meeting were Udom Emmanuel , governor of Akwa Ibom state; Godwin Obaseki, governor of Edo state; Seriake Dickson, governor of Bayelsa state; Nasir el-Rufai of Kaduna and Atiku Bagudu, governor of Kebbi state.

Kemi Adeosun, minister of finance and Udo Udoma, minister of budget and national planning, as well as a representative of the NNPC GMD, also attended the meeting which ended at few minutes after 8pm.

While briefing state house correspondents at the end of the meeting, Yari 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,” he said.

“We met last week with NNPC and we came and briefed our chairman of the National Economic Council (NEC). We raised three issues: one, the issue of royalties. Each and every barrel taken out of the country, there is either 17 or 24 percent of it as royalty and there is 17 or 20 percent as tax.

“So, our main concern is that (DPR) said that the NNPC is not remitting anything from the payment of royalty; what they do is that they transmit direct from the NNPC to the federation account, which is not allowed by the law.

“According the law that established the DPR, section 196 of the Act, says all the royalty should be paid to DPR and then transmitted to the federation account, which is not happening.

“So, we discussed today and we have sorted those ones out. The NNPC will not transmit to federation account 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.”

The governors also raised concerns over the joint venture cash call claims made by the NNPC and directed that further payments for such should be suspended until the corporation gives details of exactly how much has been paid since 2015.

“At the same time, NNPC is making payment on behalf of Nigeria on cash-call contribution and also the NNPC is making payment of cash call arrears of Nigeria’s contribution. 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,” he said.

“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 payment 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, the oil was $40 per barrel and now it is about $78 a barrel, they are depending largely on importation. Therefore, 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 litres 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 litres 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 litres per day. So, we are wondering where the 60 million litres is coming from. So, we are trying to sort that one out; that one is not yet resolved.

“But, we are now taking a very hard decision; because NNPC said the reason why they were lifting 60 million per day is because our borders are porous, we have taken the decision that any filling station that is 10 kilometres on the border side should be closed by DPR. And then, we will do re-certification according to the needs. Secondly, we have directed the minister of finance in collaboration with the DPR and the NNPC to put tracking devices on every truck in other to monitor where they are discharging the fuel. That is because we are suspicious of the number; we cannot confirm the difference from 30 million litres per day consumption to 60 and 65 million litres per day. So, these are our decisions on the NNPC.”

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