The office of the Auditor-General of the Federation, AuGF, has revealed that the defunct Nigerian National Petroleum Corporation, NNPC, now NNPC Limited, failed to account for about 107,239,436.00 barrels of crude oil lifted for domestic consumption in 2019, .
The AuGF, in a report, also revealed that available records from the performance report of two depots, revealed that about 22,929.84 litres of Premium Motor Spirit, PMS, valued at N7.06 billion, pumped to the two depots (Ibadan-Ilorin and Aba-Enugu) between June and July 2019, were not received by the depots.
This revelation formed part of 6 audit queries from the AuGF, as contained in the Federal Government’s consolidated financial statements for the year ending 31st December, 2019, submitted to the Clerk to the National Assembly, via a letter dated 18th August, 2021, and signed by the Auditor-General, Adolphus Aghughu.
The report identified discrepancies between the amount reported by the NNPC as transfer to the Federations Account, and what was reported by the AuGF.
It said that while the NNPC records showed that N1,272,606,864,000.00 was transferred by the Corporation, the amount recorded by the Accountant-General of the Federation was N608,710,292,773.44, showing a discrepancy of N663,896,567,227.58.
The AuGF noted that the then Group Managing Director, GMD, of the NNPC, Mele Kyari, should be asked to explain the discrepancy between the two figures, and remit the balance of N663,896,567,227.58 to the Federations Account, or face sanction.
The report further stated that the sum of N519,922,433,918.46 was transferred to the Federation Account by the NNPC, based on transfer mandates, while demanding that the company provides “reconciliation statement for the difference of N88,787,862,853.96, between AGF’s figure of N608,710,296,772.42, and NNPC’s figure per transfer mandate of N519,922,433,918.46”.
It said: “Audit observed that 107,239,436.00 barrels of crude oil were lifted as domestic crude, while allocation of crude oil to Refineries for a billing date of 9th January to 29th May, 2019, was 2,764,267.00 bbls, valued at N55,891,009,960.63.”
It said further that “information on sale of unutilised crude oil by Refineries for 2019, was not provided, and information on crude oil allocations from 30th May to 31st December, 2019, was not provided for scrutiny”.
While alleging possible diversion of domestic crude, diversion of sale of un-utilised crude, as well as possible loss of Federation Account revenue, the report said that the Management of the NNPC failed to respond to the audit query.
The report added: “The Group Managing Director of NNPC is requested to provide the complete schedule of allocation of crude oil to Refineries from 1st January to 31st December, 2019, furnish details of sale of unutilised crude oil, and reconcile it with total domestic crude oil of 107,239,436.00 bbls lifted in 2019, and remit amount realised from sale of unutilised crude oil to the Federation Account.”
The report stated further that section 162 (1) of the Constitution of the Federal Republic of Nigeria, 1999, as amended, states that “the Federation shall maintain a special account to be called ‘the Federation Account’, into which shall be paid all revenues collected by the government of the Federation, except the proceeds of the personal income tax of the personnel of the Armed Forces of the Federation, the Nigeria Police Force, the Ministry or Department charged with the responsibility of Foreign Affairs, and the residents of the Federal Capital Territory, Abuja”.
It stressed that inspite of this provisions, the NNPC spent US$6.410 million (N1.955 trillion at N305/US$1), to fund Joint Venture Cash Calls, JVCC, and other federally funded upstream projects such as Gas Infrastructure Development, Brass LNG, Crude Oil PreExport Inspection Agency Expenses, Frontier Exploration Services, EGTL Operating Expenses and NESS Fee, and another N55.157 billion on Pipeline Security and Maintenance, without first paying the money into to the Federations Account.
The AuGF maintained the Group Managing Director of the NNPC should justify non-adherence to the transfer of all Federation revenue to the Federation Account, as provided by the Constitution, and ensure that all revenue is paid into the Federation Account, going forward.
The report also said that: “The Audit examination on ‘Schedule of Inflow of Revenue’ by the NNPC to the Federation Account obtained from the Office of the Accountant-General of the Federation, revealed that the Domestic Gas Receipts of N4.572 billion, was transferred to the Federal Inland Revenue Service (FIRS) Petroleum Profit Tax (PPT)-Gas, in the month of January 2019, and was not made in the subsequent months of the year.
“This transfer reduced the amount due to Federation Account for the month of January 2019, to the tune of N4.572 billion”, leading to possible “reduction of distributable revenue in the Federation Account, misapplication of fund, and diversion of revenue”.
It noted that about 22,929.84 litres of PMS valued N7,056,137,180.00, pumped to two depots in the country, in 2019, were not received by the depots, while no reason was advanced by the Agency for the non-receipt of the product, demanding that the value of the products be remitted to the Federation Account.
It revealed further that a total 239,800 bbls of crude oil valued at N5.498 billion, was received in Warri and Kaduna Refineries, respectively, between January and December 2019, with the source of the crude not validated, due to absence of source documents.
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