Minister of Finance, Dr. Okonjo Iweala has uninspired confidence when she said that the $20 billion alleged to be missing from the Nigerian National Petroleum Corporation (NNPC) would be investigated just like the subsidy scam was also investigated. Her remarks, made to journalists after the Senate Committee on Finance drilled her on the scam which was brought to light by Central Bank Governor, Mallam Lamido Sanusi, has not inspired confidence in most Nigerians. This is due to the fact that the subsidy scam was mostly swept under the rug.
Okonjo-Iweala said, “It should be emphasised that the issue of unremitted funds by the NNPC is not new; it has been an ongoing issue at every Federation Accounts Allocation Committee meeting chaired by the Ministry of Finance, as evidenced by reports from the monthly meetings.
“As of December 2013, the cumulative un-reconciled figure of shortfalls from NNPC payments stood at N1.792tn, or about $11bn.
“On the original $10.8bn, which was the shortfall we had as of July 2013, another reconciliation meeting was held at which NNPC presented data of how it utilised the balance of $10.8bn, namely: amount withheld for subsidy, $8.766bn; holding cost of strategic reserves, $0.4599bn; crude oil and product losses, $0.761bn; and pipeline management cost, $0.905bn, for a total of $10.89bn.
“The data presented were all certified by the PPPRA as being accepted. We asked to see the backup documentation to enable verification.
“Our judgment is that a proper examination of these documents requires technical expertise beyond the capacity of the reconciliation team, and, therefore, we believe we should have an independent forensic audit managed independently of these submissions.”
In his own submission, CBN governor, Mallam Sanusi told theMakarfi led committee, “We established that the NNPC shipped about $67bn worth of crude and about $47bn came back to the Federation Account; so, there is $20bn unremitted. The finance minister had explained that there was $6bn that the NNPC said it shipped on behalf of the NPDC.
“There is the $2bn third party finance and the balance of $12bn from our books, and even from the NNPC submissions, it is what is outstanding from the domestic crude of $28bn that was exported by the Nigerian Petroleum Development Company.
“As far as the CBN is concerned, the most important point to establish is that there is a difference of $20bn between what the NNPC shipped and what it repatriated.
“We have presented documents from the PPPRA and the Presidency that, in our view, there is no subsidy on kerosene first of all, and that the payment of kerosene subsidy is a violation of a written presidential directive.”
Diezani Madueke, Petroleum minister said the Presidential directive given by former President Umar Yaradua was not binding as it was not gazetted. She also confessed that the majority of Nigerians do not benefit from any kerosene subsidy even though billions of dollars are enjoyed by the NNPC and other marketers for the economic benefit.
She said, “For years, the issue of the directive given by the late President Umaru Yar’Adua had been brought up over and over again. At the time, an inter-ministerial meeting was held with both the ministers of Finance and that of Petroleum and a decision was taken to stay action on the memo because kerosene was very crucial to Nigerians.
“The masses of Nigerians deal with it today. The landing cost is N150, but it was being subsidised and sold at N50.
“Because we cannot effectively move the products around the country because of the damage done to our facilities, the marketers took advantage of that more than others; so, bridging cost is added since the product is being moved around by road.”
Group Managing Director, NNPC, Mr. Andrew Yakubu, said that the amounts appropriated for the subsidy in 2012 (N888 billion) and 2013 (N971 billion) were inadequate, leading to the corporation dipping its hands in funds to finance the subsidy.
“This development led to the accumulation of $8.76bn as unpaid subsidy due to the NNPC for petroleum products supplied during the period under review. This amount comprised $5.25bn for PMS (petrol) and $3.51bn for DPK (kerosene),” he said.
The Senate Finance Committee chairman, Ahmed Makarfi said it was important to note that the money was being spent despite not being appropriated for and this was the biggest issue.
He said, “We have also received certification for kerosene subsidy but the key issue is the appropriation to it and we have all agreed here that no appropriation has been made for it.
“The implication of spending money that is not appropriated is well known to everybody and the whole world is hearing this. I don’t want us to joke or play with this. It is the most central issue.
“All agencies that have spoken have confirmed to the whole world that this money was not appropriated and I want people to absorb the import of this confirmation.
“We will deliberate on how to deal with the past, how we will deal with the future is critically important and this is the best time to deal with the issue to avoid further contravention.”
He said the committee would conduct a forensi examination of the documents and take its decision on the expenses incurred by the NNPC.
Okonjo Iweala also said an independent forensic team would investigate and report back within a month on its findings.