The stand off between Federation Account Allocation Committee ( FAAC) and the Nigerian National Petroleum Corporation( NNPC) may not end soon until the latter pays in to federation account, the correct amount.
Addressing the media Saturday in Abuja, Chairman, Forum of Finance Commissioners, Mallam Mahmoud Yunusa explained that, ” based on all provable assumption parameters, the Nigerian National Petroleum Corporation ( NNPC) is to remit N87.6 billion being Petroleum Profit Tax( PTT) and N60 billion as Royalty amounting N146 billion to the federation account as against N127 billion paid by NNPC.
Yunusa noted that, while NNPC claimed it spent N3.5 billion on product leakage, pipe line vandalism, the Department of Petroleum Resources ( DPR) an agency who supposed to keep such record claims ignorance of the amount.
The chairman of the forum also said that the Finance Commissioners Forum is strongly behind the minister of finance’s position that NNPC must remit all the revenue accrued to it.
He said NNPC remittances to federation account is a recurring issue, stating that the current development provides opportunity to address it holistically.
” It’s better for us to stand down the FAAC with all the pains involved because some state have not paid salaries and is a good development to trash it once and all.
In the past ,no body dares NNPC but now that we have a transparent government in place. What is happening now is not a disagreement per say but what I can call progressive disagreement “,said Yunusa.
He said that as equal stakeholders in the business, NNPC owes it a duty to Nigerians in the spirit of openness and transparency and by the Act that established it to be open and transparent to all stakeholders.
He said states as stakeholders in federation account are not expected to take NNPC’s account hook, line and sinker but are allowed by law to ask questions for clarity.
Mr Yunusa said: “The objective of this briefing is to inform you on our position on the contentious issues between our forum, FAAC and NNPC which is the major revenue driver of the economy.
We don’t intent to join issues with the NNPC but we want to make it very clear to NNPC that it is a public company and it is requested that its operations be made public because it is meant to make profit.
And as shareholders and stakeholders interested in the running cost of this public investment, the major issue we are having with the NNPC is discrepancies in the figure.
You don’t expect us to accept and adopt whatever amount remitted to FAAC by NNPC. We have to go through it and if it convinced us then we accept but where it is not clear to us, we have to seek for proper reconciliation.
“There are a lot of happenings with the with the NNPC, we have read in the papers that NNPC said it has remitted what it was supposed to remit to FAAC. NNPC claims it has remitted N147 billion but what the NNPC actually remitted to FAAC is N127 billion.
By law NNPC is required to remit all funds accrued from the sales of crude oil. Based on our analyses, this N127 billion is inclusive of royalty and PPT.
How can that be? But the law establishing these agencies (DPR and FIRS), royalty should be given to DPR, while PPT should be given to FIRS in line with the law.
NNPC has remitted N127 billion and it claims it was expected to remit only N112 billion, even if they had agreed with the governor’s to remit N112 billion when the oil was sold at $50 per barrel, what stops them from paying more now that the oil price is at $80 per barrel?
“Based on what is happening in the economy especially in the oil and gas sector, the oil price is at $80 per barrel and the production is steady which we are producing about 2 million barrel per day we expect that the remittance from the NNPC should add value to what the federal government is doing.
“DPR confirmed to us that based on the production capacity, the royalty should be at N60.8 billion so when you add this N60 billion with the N127 billion remitted by the NNPC, it will give you N187.8 billion. The N60.8 billion royalty was supposed to have come through DPR.
The royalty supposed to have come separately from DPR but the NNPC does not remit it to DPR. Again, based on the record of the NNPC which it uses in calculating PPT is 1/1:46. Whatever, the amount, you multiply it by 1:46 therefore, the expected PPT is N87.6 billion.
“So we have to go back to look at the different in the figure remitted by NNPC deduct the taxes -royalty and ppt then we will know if the figure is accepted.
We are doing this on behalf of Nigerians, because we want to resolve this issue once and for all. We are not comfortable with the figures the NNPC remitted.
It is a kind of holistic thing. We even want to know what are the cost incurred by the NNPC? What are the personnel cost? Are there other cost incurred by the NNPC? If there are then we review the cost, and know how much should be deducted for such cost. But it is not for NNPC to appropriate and reprobate at the same time.
We have to look at what are the status of the refineries, are the refineries making profit of losses? If they are making profit, then what are the loss? Are we just injecting money into the refineries without gains? All these information are not clearly known to us.
“This action is in the interest of Nigerians, in the interest of transparency and accountability and is in the interest of good governance because these are public funds.
The government that is on seat now is a government of change and we intend to ensure discipline and transparency and accountability.
If you look at it, there are specific explanation that we want NNPC from NNPC such as what is the actual volume of crude oil that is lifted daily by the NNPC? What is the PMS consumption volume on daily basis? The NNPC does not provide detail information on these issues. “