NNPC attacks House subsidy panel, says report "absurd, unfounded"

The desperate attempt by individuals, institutions and groups indicted in the report of the House of Representatives Ad hoc Committee on Fuel Subsidy Probe to extricate themselves from blame continue at the weekend, with the Nigerian National Petroleum Corporation (NNPC) denying claims that it received fuel subsidy claims from two different sources.

The committee said on pages 97 and 98 of its report that apart from direct deductions from revenues realised from its operations meant for the Federation Account, the NNPC also received additional payments from the Central Bank of Nigeria (CBN) for subsidy claims on petroleum product imports.

According to the report, the corporation deducted about N408.255Billion, in addition to N81.648billion paid to it by the CBN in 2009; N407.801billion and N402.423billion in 2010, and N847.942billion and N844.944billion in 2011 respectively, contrary to Section 162 of the 1999 Constitution (as amended).

The section makes it mandatory for all revenues accruable from government business to be transferred into the Federation Account for sharing among the three tiers of government according to approved revenue sharing formula.

The report accused the corporation of over-deduction for 2011 by about N285.098billion contrary to the N540.419billion recommended by the Petroleum Products Pricing Regulatory Agency (PPPRA).

But the NNPC, in a rebuttal on Sunday, denied ever being paid subsidy claims by the CBN, describing the committee report as unfounded and absurd.

“Such a claim is totally unfounded and absurd,” Levi Ajuonuma, Group General Manager Group Public Affairs Division of the NNPC said. “We challenge both the CBN and Ad Hoc Committee to provide evidence that such payments as alleged were made to NNPC. They must show authorisation for the payments as well as breakdown of the amount, purpose for the payments, beneficiary accounts in which such payments were made and the utilisation of such payments.”

According to Mr. Ajuonuma, rather than collecting such payments from the CBN as alleged, the practice has always been for the NNPC to apply such subsidy approvals as credit due to it towards the cost of its domestic crude allocation.

 “For the purposes of clarity subsidy payments to NNPC is not based on cash remittance,” Mr. Ajuonuma said. “The mechanics of subsidy recovery by NNPC is not fund-based, but by way of deduction from crude cost due. As a matter of fact, from the commencement of the subsidy regime there was never a time when CBN paid any money to NNPC in respect of subsidy claim’’.

He said out of about N981billion approvals presented by NNPC to PPPRA as for total subsidy claims for 2011, onlyN844.9billion was credited to NNPC, faulting the committee’s claim that only N504billion was approved.  

Accusing the committee of a mindset to “maligning and damaging the reputation of the Corporation as well as other key players of the industry,” the NNPC spokesman said from a review of the report in general are that “the committee seems not to be sure of its action as its intention was really not to clarify the subsidy payments.”

“It is clear that the tone of the Committee’s report is not only damaging to the Corporation, but to the entire nation,” he added.

On the issue of its deduction of subsidy payment as a first line charge, Mr Ajuonuma said the basis for the deduction for both cash calls for Joint Venture operations and NNPC’S subsidy payments as a first line charge on the income of the Federal Government is statutory and founded on the Appropriation Act.

“Under the said Appropriation Act, certain budgetary items including subsidy payments to the NNPC are listed as first line charges on the income of the Federation,’’ he noted.


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