The just released audit report by PricewaterHouse Coopers
PWC on the financial management of the NNPC has revealed
that there were many cases of duplicated subsidy payment by
the NNPC to many oil marketers between 2012 and 2013.
According to the report, payment of subsidies for petrol (PMS)
and kerosene (DPK) between January 2012 and July 2013
when investigated had a difference of $980 million (about
N195 billion) due to duplicated payments.
“Our review of the subsidy documentation revealed that
the subsidy due to NNPC between January 2012 and
July 2013 on PMS and DPK import was $8.99billion
compared to the $9.97 billion stated by the
Reconciliation Committee.
The difference was due to the following: Exclusion of October
2011-December 2011 subsidy claims of $1.2billion. This does
not relate to the review period of January 2012 to July 2013;
$0.13billion increase in PMS subsidy claimed for the 19
months period, $0.09billion increase in DPK subsidy claimed
for the 19 months period; duplicated discharges noted in
subsidy computations Our examination of the PMS and DPK
import verified by PPPRA revealed that some discharges were
apparently verified and subsidy advised to NNPC more than
once,” the report stated.
According to Leadership, the report showed NNPC spent
$18.53billion (or N3.65 trillion) as operational costs without a
duly approved budgetary allocation. The report also indicated
that the total gross revenues generated from the federal
government crude oil lifting between January 1, 2012 and July
31, 2013 was $69.34 billion and not $67 billion as earlier
stated by the federal government’s Reconciliation Committee.
The report also stated it was unable to verify the exact
unremitted revenues accruing to the Federation Accounts as it
did not have access to NPDC’s full account. The Nigerian
Petroleum Development Company is a subsidiary of the NNPC.
“We did not have access to NPDC’s full accounts and records
and we have not ascertained the amount of costs and
expenses which should be applied to the US$5.11billion Crude
Oil revenue (net of royalties and PPT paid) per the NPDC
submission to the Senate Committee which should be
considered as dividend payment by NPDC to NNPC for
ultimate remittance to the Federation Account.
Between 12 January and 29 January 2015, NNPC provided
transaction documents representing additional costs of $2.81
billion related to the review period, citing the NNPC Act LFN
No 33 of 1977 that allows such deductions. Clarity is required
on whether such deductions should be made by NNPC as a
first-line charge before remitting the net proceeds of domestic
crude to the Federation Accounts. If these are deemed not to
be valid deductions, then the amount due from NNPC would
be estimated at $2.07 billion (without considering expected
known remittances from NPDC) or $4.29 billion (if expected
known remittances from NPDC are considered).”
The forensic audit became necessary following a letter in
September 2013 by the former governor of the Central Bank of
Nigeria (CBN), Sanusi Lamido Sanusi, to President Goodluck
Jonathan stating that from January 2012 to July 2013, NNPC
lifted $65 billion worth of crude on behalf of the federal
government but remitted only $15.2 billion into the Federation
Accounts, with $49.8 billion as outstanding to the federal
government. On December 13, 2013, the NNPC responded that
no money was missing.
A Reconciliation Committee comprising representatives of the
CBN, NNPC, Department of Petroleum Resources (DPR),
Federal Inland Revenue Service (FIRS), Office of the
Accountant General (OAGF), the Budget Office of the
Federation, Federal Ministry of Finance and the Federal
Ministry of Petroleum Resources was set up On December 18,
2013, the Reconciliation Committee, in its report, estimated
the unremitted funds at $10.8 billion while the CBN said it
was $12 billion.
The CBN on February 4, 2014 informed the Senate Committee
on Finance that the NNPC needed to account for $20 billion
as the CBN could only confirm receipt of $47 billion of $67
billion revenue. On February 13, 2014, the NNPC provided
explanations of the $20 billion shortfall while the finance
minister and coordinating minister for the economy
recommended an independent forensic audit. On June 5, 2014,
PwC was appointed by the office of the Auditor General of the
Federation (OAuGF) to conduct a
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