Reps to NNPC: Stop deduction from Federation Account

The House of Representatives has warned the Nigeria National Petroleum Corporation (NNPC) to desist from deducting money from the sale of petroleum products before paying accruing revenue into the Federation Account, saying doing so will attract punitive measures against them in future.

The House also asked the NNPC to account for about $228.9 million from the sale of domestic gas that was not remitted to the Federations Account as well as N3.878 trillion unremitted to the Federation Account from the sales of domestic crude.

Chairman of the House of Committee on Public Accounts, Hon. Oluwole Oke gave the directive when the management of the NNPC appeared before it to defend series of audit queries against the corporation by the office of the Auditor-General of the Federation.

Oke said making such deductions from source offends section 162 of the 1999 Constitution which stipulates that all revenue collected by all revenue agencies should be paid into the Federation Account in full.

He, however, said the law governing the operations of the NNPC should be amended to enable government make provision for an amount to be paid to the NNPC as collection fees as it is done to other revenue agencies such as the Nigeria Customs Service (NCS) and the Federal Inland Revenue Service (FIRS).

The NNPC had failed to appear before the House Committee for about 10 times to defend the audit queries against the corporation while also asking its 18 subsidiaries not to honour the invitation from the parliament thereby drawing the anger of the lawmakers.

The NNPC was, however, represented at yesterday hearing by the Chief Financial Officer, Umar Ajiya and the Group General Manager, Federation Accounts, Bello Abdullahi.

Ajiya, however, told the Committee that the subsidiaries could not honour the House invitation because as the Chief Financial Officer of the Corporation, he was in a position to defend their actions.

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But Oke told the NNPC team that “this parliament is a parliament of rules and the constitution of the Federal Republic of Nigeria has given us the window to conduct our activities in a manner that is suitable for us.

“When we ask your subsidiaries to cause appearance, it is pursuant to section 88 and 89 of the constitution. We want to hear from them and obtain evidences from them because they are subsidiaries and there are chief executive officers.

“We have queries against NAPIMS. Yes, NAPIMS reports to you, but it is our own right in this parliament to determine how we conduct our own business. We have a mystery to cure. We want to be able to ask the MD of Warri Refinery or the MD of Kaduna Refinery questions because there are queries from the Auditor-General against them.

“I am from the corporate world and would have agreed with you. But when the Auditor-General of the Federation specifically listed agencies, they must cause appearance before this committee. DPR has been here and have answered all their queries.

“Our ruling is that all subsidiaries under NNPC should cause appearance within two weeks. We don’t want to engage any agency of government in mudslinging. Members of the public are asking us why we have not laid our report.”

Responding to query on the N865 billion deducted from the 2015 revenue by the Corporation, Ajiya said the money represented payment to joint venture partners as captured in the Appropriation Act for the year, adding that it is treated as “a first line priority charge against the oil revenue as provided for and to ensure that we satisfy our obligations to our JV partners in accordance with the joint operating agreement entered into with them”.

But Oke said it was not a defence for them to dip their hands into the accounts because they have access to the fund rather than paying the money into the federation account as stipulated by the law.

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He said: “The offence there is that you took the money from source and did not wait to be given what is budgeted for you. That offends the constitution. You should ask for what is yours and not take it by force like you have done. Going forward, this must stop and must not happen again. Maybe the government should agree on what should be given to the NNPC as cost of collection”.

On the non remittance of N3.8 trillion to the Federations Account from the sale of domestic crude, Ajiya said a reconciliation carried out by KPMG showed that the Federal Government was actually indebted to the corporation to the tune of N237 billion.

He said the KPMG reconciliation which was ordered by the Governors Forum and the National Economic Council was to determine the whereabout of the money, adding that the report indicated that instead of N3.8 billion, the NNPC was indebted to the Federations Account to the tune of N557 billion.

He said further “the same report also showed that the federation account was owing the NNPC the sum of N787 billion. In effect, the Federations Account was owing the NNPC the sum of N237 billion”.

The House Committee however decided to work out a timetable for the Corporation to appear before it on a daily basis for the next two weeks to defend all audit queries against it.

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