. CBN is inconsistent, selective, says NNPC boss

Central Bank of Nigeria, CBN, Governor, Mallam Lamido Sanusi, has alleged that the outstanding unremitted amount due to the federation account from the sale of crude oil by the Nigeria National Petroleum Corporation, NNPC, is $20bn and not $10.8bn. Sanusi stated this at the resumed public investigation on the alleged unremitted $49.8bn crude oil revenue yesterday by the Senate Committee on Finance at the National Assembly.

Sanusi alleged that out of the $67bn crude oil sold by the NNPC, only $47bn had been receipted by the CBN, leaving a balance of $20bn. Sanusi had last year written a letter to President Goodluck Jonathan, accusing NNPC of failure to account for $49.8bn accruing from unremitted amount from the sale of crude oil.

This prompted the President to direct all the stakeholders to have a joint meeting to reconcile the amount in question. At the end of the exercise, it was agreed by the parties, which included the Finance Ministry, CBN, NNPC, the Budget Office, Federal Inland Revenue Service, FIRS, Directorate of Petroleum Resources DPR, and Petroleum Products Pricing and Regulatory Agency, PPPRA, that the outstanding amount was $10.8bn.

Sanusi’s fresh allegation came as the NNPC Group Managing Director, Mr. Andrew Yakubu, faulted the governor’s claims, stressing that the CBN as bankers did not understand the petroleum auditing processes. Yakubu also accused Sanusi of bandying the entire gross earnings of NNPC instead of actual net earnings.

Chairman of the Senate Committee on Finance, Senator Ahmed Makarfi, expressed indifference to the allegations raised by Sanusi. According to Makarfi, what Sanusi said was not a fresh issue, as it was already known to the committee and the reconciliation team set up on the matter.

He directed the various teams handling the reconciliation of the said unremitted accounts to fast-track their activities and come up with the exact amount by Thursday next week, when the public hearing would reconvene.

Sanusi said: “I have a 20 page presentation with 30 appendages but we have to first of all agree on what has been paid into the CBN. NNPC did a presentation. We have all agreed earlier that $14bn out of the $67bn they shipped came in to the dollar account of the federation.

“We have looked at FIRS numbers and we have confirmed that $16bn paid by international oil companies to the FIRS account was not paid by the NNPC but paid by IOCs. It was the proceeds of crude lifted in the name of NNPC but sold on behalf of FIRS.

“That $16bn had been confirmed by FIRS and had accepted. There is $1.6bn that DPR also received from IOCs, which was part of that crude and which CBN had accepted. We have provided evidence in the naira crude account out of the $28bn domestic crude shipped by the NNPC, it had repatriated $16bn.

“Out of the $67bn that has accrued to the NNPC account we have accounted for $47bn. Out of the $67bn that the NNPC shipped, $47bn had been repatriated to the CBN. What we are talking about is the balance of $20bn and what explanations had been given.”

Responding to the allegations raised by Sanusi, the NNPC boss said: “The issues that were raised are not new at all. You see we came out in details because we don’t have anything to hide and we gave a detailed breakdown of the so called $49bn and we came out clearly to state the various streams that are associated with what he was talking about.

“Now, we also made it clear that NPDC (National Petroleum Development Company), if we had anything to hide we would not have made it clear that NPDC was part of the stream, because NPDC which is NNPC’s upstream operation, is a limited liability company registered under the Companies and Allied Matters Act, CAMA, to do upstream business just like any other independent company.

“Now, if you are in your business, will you take your gross revenue and pass it on? What we simply said was to account for the streams that the CBN Governor erroneously captured.

Now let me make this point very clearly; CBN is a banking outfit, so I really, really understand why they will not understand some petroleum engineering issues and they are not also an auditing outfit.

“Now what they try to do is to audit and I heard some statements made here that they do not have this document, they don’t have that document. They are not the auditors.

We have certified bodies and arms of agencies that are charged with the responsibility of auditing. They are banking right? So what he (Sanusi) said was not really new.

We said clearly that we stated an amount that went to NPDC and that amount was the gross lifting. But there are other streams that go back to government in terms of taxes just like any other business player. “So we have Royalties, we have Petroleum Profit Tax and so on and so forth.

Now these are subjects of other detailed discussions and investigations and they are open. We give access to the Auditor General of the Federation, we give access to Accountant-General, we give access to agencies that have business to do with auditing our own business.

And at the Federation Account too, we render this report as you are told on monthly basis and these are issues that are subject of reconciliation on monthly basis.

“So really for issues like this to come to the public glare again becomes worrisome that we throw away numbers, we throw away allegations that at the end of the day we clarify but then the damage would have been done.”

The NNPC had said previously that no funds were missing and that the $10.8bn allegedly unaccounted for had been used to fund operations include subsidy deductions and pipeline maintenance and repairs. The NNPC in a statement issued late yesterday accused the CBN of inconsistency and being selective of the figures on which it based its calculations.

“We are concerned by the dynamics of the moving numbers as the Central Bank’s figures keep changing. This is a worrying trend coming from an Agency of Government charged with managing the financial affairs of Nigeria”, the statement said.

It added; “While NNPC and other relevant government agencies are in the process of reconciling the $10.8bn as accepted by all parties, we are surprised by the new $20bn figure introduced by the CBN. According to CBN the $20bn is made up of $12bn subsidy claim, $6bn NPDC gross revenue and $2bn third party revenue. It is worthy to note that the CBN accepted NNPC submission with respect to $16bn royalty and PPT payments into the federation Account through the FIRS.

This indicates that the CBN cherry picks the figures.” The NNPC said that for example, in taking the entire $6bn gross revenue accruable to NPDC and allocating same to the federation account, CBN simply multiplied the gross production by the crude oil price; thereby failing to account for the operating costs (opex) and amortized capital expenditure that underpin the production.

“In other words, the CBN failed to take into account the cost of production.” “We reiterate that NPDC has been remitting the royalty and petroleum Profit Tax, PPT to the Federation Account. NPDC as a subsidiary of NNPC operates a business model similar to other international companies in Nigeria and abroad and will continue to be governed by these global best practices in the execution of these assets.

“Regarding the subsidy claim on kerosene, it is important to note that NNPC as the supplier of last resort is the only company supplying this product in Nigeria for the benefit of the citizenry. If kerosene has been deregulated why are the independent marketers not supplying this product in line with what is applicable to diesel (AGO).

“NNPC owes a duty to Nigerians to ensure that there are adequate products in the country.

This mandate has without question been accomplished in the past four years. NNPC deserves to be commended rather than battered, for ensuring adequate supply of kerosene at regulated price of N50.00k. NNPC cannot be held responsible for any differential pricing from non NNPC retailers

. This is the basis for NNPC’s claim on kerosene subsidy.”