The Nigerian National Petroleum Corporation (NNPC) has rejected the audit report by the Office of the Auditor-General of the Federation (AGF) which accused the body of failing to remit the sum of N3.235 trillion to the Federation account for the period ended December 31, 2014.
The NNPC said that the audit report submitted to the National Assembly on Monday was erroneous, as the body was only behind in its payment to the Federation Account by 326.14 billion, an amount it says is being reconciled.
The group, in a Wednesday statement by its Group Executive Director and Chief Financial Officer, Mr. Isiaka Abdulrazaq, in Abuja, said that it was compelled to set the record straight because not doing so might jeopardise its future financial and business operations.
The statement added that it was worthy of note that the current NPPC board was inaugurated in August 2015, but it owed the corporation a sense of duty to protect its integrity.
“The NNPC wishes to state in strong terms that the AGF’s declaration is inaccurate.
“The Auditor-General of the Federation’s declaration is erroneous. It should also be noted that although this period is before the new NNPC management was appointed in August 2015, the management still deems it fit and important to correct any misinformation about the activities of the corporation as this will adversely affect its current and future financial and operational plans if not corrected.
“Upon the appointment of the new NNPC management, it identified all legacy claim issues between NNPC and the federation account and engaged with the Federal Ministry of Finance to resolve the issues by inviting the appointed forensic auditors to conclude the previous forensic audits on these claims and the final report on this is expected soon.”
NNPC, Abdulrazaq noted, would have ignored the auditor general’s report but for the level of publicity it had generated.
“It is not in NNPC’s character to join issues or trade blame with other agencies of government, but considering the high level of publicity generated by the purported declaration by the auditor general to the National Assembly that NNPC has failed to remit the sum of N3.235 trillion and the erroneous impression it has created among Nigerians and the international financial community, it has become imperative to set the records straight.
“The declaration by the AGF may have been born out of misunderstanding of how revenues from crude oil and gas sales are remitted into the Federation Account,” the statement read.
Explaining how the revenue generated is utilised, the statement read: “As part of its responsibilities, NNPC is allocated 445,000 barrels per day for processing into petroleum products for distribution to the nation.
“Any unprocessed crude is sold and the proceeds used to pay for importation of petroleum products. The proceeds from the sale of these products are remitted to the Federation Account after deducting the cost associated with the supply and distribution.”
These costs include: subsidy on petroleum products, which the NNPC argued it was entitled to as a major supplier of petroleum products to the nation and crude oil and petroleum product losses as a result of vandalism on its network of pipelines for the period covering January 2012 to December 2014 amounting to N202.68 billion.
The corporation noted that the total amount of subsidy that had been approved and certified for it by the Petroleum Products Pricing Regulatory Agency for the period of January 2012 to December 2014 was N2.34tn, adding that an additional N7.96bn subsidy claim was still under reconciliation
According to the statement, other costs incurred by the corporation include those for holding strategic petroleum product as well as repairs and maintenance costs for the period January 2012 to December 2014, all of which amounted to N358.88 billion.