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NNPC’s $20.9bn Oil Revenue Declaration Misleading – Reps Committee

The Finance Committee of the House of Representatives has accused the Nigerian National Petroleum Corporation (NNPC) of releasing misleading figures of earnings from oil to Nigerians, saying while it was declaring shortfall in revenue, it has also been remitting income to the Excess Crude Account which is exclusively for excess income.

Chairman of the committee, Hon Abdulmumin Jibrin, who disclosed this in a press statement also asked the Minister of Petroleum Resources, Mrs Diezani Allison-Madueke to stop the secrecy and make proceeds from gas available to the public as well.

Following shortfall in revenue, the Nigerian Governors’ Forum called for the resignation of the minister of Finance and coordinating minister of the economy, Dr Ngozi Okonjo Iweala. this elicited reactions from lawmakers, individuals and groups including the  governor of Delta State, Emmanuel Uduaghan, who argued that the Minister of Petroleum, Mrs Diezani Alison Madueke is the one to question.

“It is gratifying to note that after a barrage of well-deserved criticisms from well-meaning observers of the oil and gas industry, the Nigerian National Petroleum Corporation (NNPC) is finally making effort to come clean with the recent release of figures of crude oil sales allegedly totalling $20.9bn for the first seven months of 2013.

“Much as this development is welcome, discerning Nigerians would be restraining their good sense of judgement if they fail to see this NNPC action for what it is: a ruse – a clear unintelligent effort at misleading the Nigerian public. This is not a surprise. A game of subterfuge is a preoccupation for which NNPC is notorious. Sadly, pushing out sham details as regards operations in the oil and gas sector has become worse under Diezani Alison-Madueke, current Minister of Petroleum Resources.

“Moreover, Nigerians are not as keen on crude oil sales figures as the actual remittances from NNPC to the Federation Account. The amount remitted to the federal government is more important and NNPC should have been more honest to present the figures so that Nigerians can understand what actually accrued,” the chairman of finance committee stated.

Jibrin noted that the Ministry of Petroleum Resources declared N1.516 trillion for the past seven months out of the N1.837 trillion projected in the budget, thereby, making a shortfall of N320.654 billion.

He went further to add they was still a shortfall despite the fact that the benchmark is $79 per barrel and crude oil prices has hardly fallen below $100 per  barrel, meaning sales were being made in prices higher than the benchmark.

He, therefore, posited that the shortfall was caused by “massive crude theft and unabated corruption in the oil and gas sector.

“For January to September 2013, the Federation was expected to earn N1.837 trillion (Or N204.168 billion per month) from the sale of crude oil and gas marketed by the NNPC with the Petroleum Minister as its Board Chair person.

It should be noted that this is after taking into consideration payments for Joint venture Cash calls (ie cost of production) and petrol subsidy payments.

However, only N1.516 trillion has been remitted to the Government by the NNPC showing a shortfall of N320.654 billion for the period.

Again, it should be noted that this is actual revenue generated at the prevailing market rate of crude oil and gas. The budget for Fiscal year 2013 was based on $79 per barrel whereas the price has hardly fallen below $100 per barrel for the whole year.

This implies that even though we are receiving way above the benchmark on our crude oil and gas sales, we are not meeting our targets because our crude oil production has fallen way below budgeted estimates as a result of massive crude oil theft and unabated corruption in the oil and gas sector,” he stated.

The lawmaker also disclosed that figures available to the Committee on Finance show that revenue targets were only barely met in the months of April (N212.029 billion) and May (N210.202 billion) while in the month of July, targets were not met (N191.549 billion) but the sum of N35.103 billion was transferred to the excess crude account.

“The Ministry of Petroleum/NNPC has to be held accountable for this shortfall. The MTEF deliberations and revenue frame work for fiscal 2014 will have to look extensively into this worrying situation. If this trend is allowed to continue it will have devastating consequences on our economy which is still dependent to the tune of over 80% on the petroleum industry.

“In any event why is NNPC only interested in releasing figures concerning crude oil? What about the proceeds from gas production? Why not let Nigerians know the total proceeds from oil and gas. And where are the dividends from gas?” he queried.

Saying the House would open an investigation on the claims, he said, “These questions have to be answered in all honesty if NNPC expects to be taken seriously. Nevertheless, the point must be made that the $20.9bn the NNPC just presented as figure for crude oil sales will provide the impetus for profound parliamentary investigations into how the figure was obtained. Suffice to mention that the process that resulted in the figures presented by the NNPC were not transparent and reliable and must go through tight parliamentary proceedings as soon as possible”.

Stressing that he has no “defined mission to undo the minister of Petroleum”, he explained that his “constant intervention in the management of Nigeria’s oil and gas is borne put of a patriotic quest to entrench the culture of transparency and accountability in the way the country’s largest revenue generating sector is being run….and a battle to right the wrongs in a system whose rot runs so deep to depict Nigeria as a huge embarrassment not just in the comity of oil-producing countries but also among right thinking people of the world.”

AmarSim Associations Development Consultants

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