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Govs accuse NNPC of fraudulent subsidy payment

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Juliana Taiwo-Obalonye, Abuja

State governors have accused the Nigeria National Petroleum Corporation (NNPC) of fraudulently doubling the nation’s daily petrol consumption from about 30 million litres to 60 million litres and have demanded a thorough probe of oil subsidy payments from 2015 to date.

The governors have also called for the closure of all petrol stations less than 10 kilometres to the nation’s borders by the Department of Petroleum Resources (DPR) until they are recertified.

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

The governors further said all trucks transporting petroleum products but have tracking device installed in order to monitor their movement to discharge stations.

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 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.

A delegation of the governors, led by the Chairman of the Nigeria Governors Forum and governor of Zamfara State, Abdulaziz Yari, expressed these concerns when they met with Vice President Yemi Osinbajo, on Wednesday night, at the Aso Rock Villa, on his return from his two-day official visit to Benue State.

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

The Minister of Finance Kemi Adeousn and the Minister of Budget and National Planning, Udo Udoma as well as a representative of the NNPC GMD, also attended the meeting which ended at few minutes after 8pm.

Governor Yari, while briefing State House Correspondents at the end of the meeting said, “This is the second time we are meeting with NNPC in respect of remittances into the federation account.

“And, 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 with the NNPC and we came and briefed our chairman of the National Economic Council. 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 the Department of Petroleum Resources (DPR), said that the NNPC is not remitting anything 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, said all the royalty should be paid to DPR and then transmit to the federation account, which is not.

“So, we discussed today and we have sort 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.

“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.

“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, the issue of subsidy resurfaced again after the efforts of Mr. President. Before now the oil was $40 per barrel and now it is about $78 a barrel, so therefore 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 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, that one is not yet resolved.

“But, we are now taking a very hard decision, that because NNPC said the reason why they were lifting 60 million per day is because our borders are porous, so we have taken the decision that any filling station that is 10 kilometers on the border side should be closed by DPR.

“And, then 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 put tracking devices on every truck in other 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 liters per day consumption. So these are our decisions on the NNPC.”

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