N98.3bn lost in 20% crude oil allocation to NNPC
No less than N98.3 billion was lost by Nigeria between 2009 and 2011 in the 20 percent crude oil allocation to the national oil company, the Nigerian National Petroleum Corporation (NNPC).
The 20 percent crude oil allocation to NNPC was meant for the four local refineries, and was thus not exported or utilised for offshore processing.
In the same period, the Federal Government, the 36 states and Joint Venture funds recorded a total of $143.52 billion as revenues.
Ledum Mitee, chairman of the National Stakeholders Working Group (NSWG) of the Nigeria Extractive Industries Transparency Initiative (NEITI), made these disclosures last week, as guest speaker at the University of Port Harcourt 2nd Faculty of Social Sciences Roundtable.
According to Mitee, who is also chairman of the Niger Delta Technical Committee and immediate past president of Movement for the Survival of Ogoni People (MOSOP), the amount was lost because the NNPC has been unable to account for the overall production of crude oil in the country.
“Over N98.3 billion was lost between 2009 and 2011 from the 20 percent crude oil allocation to the Nigerian National Petroleum Corporation (NNPC) for local refineries, which were not exported or utilised for offshore processing,” said Mitee.
“The 2009 – 2011 audits, for instance, shows total payments of $143.52 billion as revenue to the Federal Government and states, as well as Joint Venture funds. While the Niger Delta Development Commission (NDDC) and the Tertiary Education Trust Fund (TETfund) received $3.2 billion between 2009 and 2011 and $2.5 billion in 2006 – 2008,” stated Mitree.
His lecture was titled, ‘From Resource Curse to Recourse Blessing: The Role of NEITI’, he said the National Stakeholders Working Group has been able to provide and publicise comprehensive and reliable data on revenues received from the extractive sector.
He also disclosed that dividends of $4.84 billion and $3.996 billion were received by the NNPC, which have neither been remitted to the Federation Account, nor accounted for by the relevant government agencies.
Mitee stated that the audit report of NEITI revealed poor institutional linkages between the technical and financial aspects of the industry; poor information gathering and storing system, which were mainly paper-based; inefficient system of financial management; poor metering infrastructure for crude oil production accounting and lack of capacity of relevant regulatory agencies to verify royalty and petroleum profit tax computations.
He said, “Through the NEITI reports and establishment of the Inter-Ministerial Task Team (IMTT), considerable improvement has been recorded in the revenue flow into the Federation Account. About $1 billion was recovered between 1999 and 2004, $550 million in 2005, whilst additional assessments were raised on PPT from 2006-2008 audit report.
“In addition, the sum of $9.8 billion has been reported as outstanding recoverable over a ten-year period arising from underpayments, differences between what was paid and what was received, poor record keeping and other leakages in the system,” he disclosed.
Mitee said NEITI conducts independent audits and publishes the results to enable the legislature, civil society and the larger society to use the information and data to hold both government and companies to account.
“Since 2004, NEITI has conducted four cycles of audit covering 13 years in the oil and gas sector: that is 1999 – 2004; 2005, 2006 – 2008 and 2009 – 2011.”
He traced the origin of the economic impact of crude oil, stating that, Nigeria’s fixation with oil to the detriment of all other sectors of the economy also explains the collapse of the most crucial drivers of any economic development.
First published in Businessday