Central Bank Governor, Sanusi Lamido Sanusi, yesterday, told the Senate Committee on Finance that of the $67 billion crude oil sales that was supposed to be remitted to the Federation Account, only $47 billion had been reconciled between the Nigeria National Petroleum Corporation, NNPC and CBN.
But the Committee’s Chairman, Ahmed Makarfi, cautioned the CBN Governor over making wild and unsubstantiated allegations without concrete and specific figures to back them up.
The NNPC, in a swift reaction, however, dismissed the allegation of another unremitted $20 billion oil revenue raised against it by the CBN.
It is uncertain how Sanusi came up with the fresh $20 billion unremitted funds against the initial $10.8 billion. The latter figure was arrived at during the account reconciliation with the Ministry of Finance, NNPC and CBN during a public hearing on alleged unremitted $49.8 billion oil revenue organised by the Senate.
CBN’s arguments
But the CBN Governor, while making the new allegation, stated: “All we have said as CBN to which there is no disagreement is that NNPC shipped $67bn worth of crude. They have repatriated or we have established that $47bn has come back to the Federation Account. There is a $20billion that has not come back to us. The burden of proof is on NNPC.
“We have made suggestions that can help to answer some of the questions and we believe that even some of that which they (NNPC) claimed were shipped by NPDC do not belong to the NPDC but to the Federation.”
He said some of the issues were subject to investigation which, according to him, had to do with whether NNPC was repatriating money due to the Federation Account or not, adding that it was necessary to investigate the issue because the NNPC had given a number of explanations on why the money had not been remitted.
Sanusi said: “May I say, Mr. Chairman, that some of those issues raised are subject to investigations. They have to do with whether NNPC is repatriating money due to the federation account or not and because NNPC had given a number of explanations for why money has not come.
“If NNPC, for instance, says we have sold $6billion worth of crude belonging to NPDC, and if the CBN believes that part of that money should come to the Federation Account, it is related to this matter and it had been captured in our presentation.
“We are here because they are related to the question of whether NNPC is returning to the Federation Account, all the amount it is constitutionally and legally required to return.
“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 $14billion out of the $67billion they shipped came in to the dollar account of the federation.
“That is agreed. We have looked at Federal Inland Revenue Service,FIRS, numbers and we have confirmed that $16billion 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 $16billion had been confirmed by FIRS and had been 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 $28billion domestic crude shipped by the NNPC, it had repatriated $16billion.
“Out of the $67billion that has accrued to the NNPC account we have accounted for $47billion. Out of the $67billion that the NNPC shipped, $47billion had been repatriated to the CBN. What we are talking about is the balance of the $20billion and what explanations had been given.
“NNPC had said some of it do not belong to the Federation Account so, $6billion NPDC we have held the position that some of the crude shipped by the NPDC is shipped from oil wells that belonged to the federation. Joint Ventures that Shell went out of, which NNPC took over and handed over to NPDC, which then handed over to two Nigerian companies and transferred revenues that should come to the Federation Account for remittance.
“I have given free legal opinion to this committee, on the unconstitutionality and illegality of that transaction.
“Secondly, NNPC had explained that 80 per cent of that money yet to be repatriated was on kerosene and fuel subsidy. I have submitted to this committee written evidence of a presidential directive eliminating subsidy since 2009, and NNPC needs to provide its authority for buying kerosene at N150 from the Federation Account and selling at N40 and inflicting that loss on the federation.
“NNPC had also said that it is DPR but for us in the CBN, every month NNPC sends report to the Federal Allocation Account Committee. And every month NNPC indicates how much it has deducted as PMS subsidy.
“From April 2012 to date, NNPC had submitted reports to the FAAC consistently showing it is deducting nothing from PMS, so we are surprised that having submitted nil returns since April 2012, we are now being told that deductions were being made.
“I don’t know whether they were made and whether the DPR had approved them. We are waiting for the reconciliation with the PPPRA. The other part of the third party financing which were not appropriated had no documentation or proof.”
Sanusi is ignorant — Yakubu
But taking up Sanusi on his presentations, the Group Managing Director, NNPC, Andrew Yakubu, expressed surprise over the CBN governor’s outburst. More so, as efforts were being made to reconcile all the differences, even with the assistance of an audit firm of high repute, saying the CBN governor was speaking from a point of ignorance.
Yakubu said: “We have made submissions but this meeting was not of detailed discussion of the submission. We came here for the Chairman to brief us on the programme and agenda on the detailed reconciliation that we are doing.
“As you were told in the meeting we are reconciling and are at the point of conclusion on the reconciliation process with the various agencies. It is at the end of this that we will submit our detailed reconciled position which the committee will study and then commence detailed review. What is reported is exactly the true position of things.
“As you are aware, the major chunk of the amount in question – over 80 per cent of it is on subsidy for both PMS and kerosene.
“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 $49billion 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, 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 by 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 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 subject 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, and we give access to agencies that have business to do with auditing of our own business.
“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.”
It will be recalled, that at a press briefing held by the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala; the Minister of Petroleum Resources, Mrs. Deziani Allison-Madueke; the Governor of Central Bank and heads of DPR and FIRS,the initial figure of $49.8B was reconciled to $10.8B. On the same day, at the Senate hearing the CBN gave a figure of $12B which was corrected by the Coordinating Minister of the Economy to $10.8B.
While NNPC and other relevant Government Agencies are in the process of reconciling the $10.8B as accepted by all parties, we are surprised by the new $20B figure introduced by the CBN. According to CBN the $20B is made up of $12B subsidy claim, $6B NPDC gross revenue and $2B third party revenue. It is worthy to note that the CBN accepted NNPC submission with respect to $16B royalty and PPT payments into the federation Account through the FIRS. This indicates that the CBN cherry picks the figures. For example in taking the entire $6B 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 ensurethat there are adequate products in the country. This mandate has without question been accomplished in the past four years. NNPC deserve 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.
At the end of the session, the Committee’s chairman, however, granted one week’s grace requested by the parties to reconcile all the differences and then bring all the necessary documents to back up their claims. Click to signup for FREE news updates, latest information and hottest gists everyday
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this man is an APC man,
ReplyDelete@ Anonymous, you meant he is a member of APC for saying the truth to the benefit of all Nigerians, or you expect him saying yes sir to all even things aren't uhuru ?
ReplyDeletelet's be reasonable sir, this country belongs to all of us and people like Sanusi will be the one to help.
Help ko help ni! So he wants to help and he went and awarded a 69billion naira contract for the building of just shopping mall in Abuja! He tagged it under CRS(corporate social responsibility) myl 5billion was paid to El rufai for the quantification of so called shopping mall! Or have we forgoten that pretty soon he will be marrying el rufai younger sister. This same man that you're tagging as helping issued 10billion naira to a single university in the north under the same CSR! Common my dear! The earlier Nigeria wakes up the better! All this folks are fighting for extremely selfish interests. Your Tinubu APC knows not you! Wake up my dear!
DeleteThey sent you to school for relevant study you choose Islamic studies now its time for calculation and you are busy fighting jihad. Whichever way you must learn how to reconcile and balance your accounts or pay back with public shame. I ***wink**
ReplyDeleteThis Sanusi is either confused or suffering from mental disorder like Fani Kayode. Yesterday it was 47b, today its 12b or 10b now its 20b dollars. MUMU, APC MAN,
ReplyDeleteTHIS MAN IS MAD.
ReplyDeleteWhich part of Nigeria is Sanusi and Yakubu from? Are they serving different governments at moment? Is it PDP V APC again? I am expecting some readings to this scandal and I want to find the reasons for this exposition. He that the God will destroy will first make mad. This government is dancing naked in the market. It is fraud galore everywhere. If GEJ does not win free and fair election in 2015, there will be war in Nigeria. It is the money coming from the oil money from Niger Delta. We can keep on stealing it.
ReplyDeleteOur law is that he who alleges, proofs. The burden of proof is always on d complainant. How could Sanusi allege, and expect another to proof. Has he lost his common sense? Earlier he alleged 49 bn dollars. After a reconciliation of d accounts btw CBN, Finance ministry nd NNPC, they jointly agreed that what's needed to be accounted for was 10bn dollars. Again, Sanusi in another shift, talking of 20bn dollars. Everybody would've expected any economic statement from d apex bank boss to hv bn well researched. From every indication, it's either Sanusi is not good with figures or he's acting APC script, towards disparaging d present administration by all means...
ReplyDelete