News Column

Senate Orders NNPC to Refund U.S.$262 Million to Federation Account

July 10, 2014

Uchenna Awom and Jonathan Nda-Isaiah

The senate has unanimously approved its Committee on Finance's recommendation directing that the Nigerian National Petroleum Corporation (NNPC) should refund to the Federation Account, the total sum of $262million being the balance of the gross lifting under the third party financing oil deal.

However, the senators rejected the recommendation that the federal government should remove the subsidy on petroleum products because of the alleged misapplication of the billions of dollars voted annually for it.

The senators also confirmed that there was no $49.8 billion missing in the oil fund as alleged by the former governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi.

The resolution was sequel to the adoption of the report of the committee chaired by Senator Ahmed Makarfi (PDP, Kaduna).

Nonetheless, they also directed that inter-agencies reconciliation meetings between institutions such as the Ministry of Finance, NNPC, CBN and the Federal Inland Revenue Service (FIRS) should be done on regular basis.

Such regular meetings among those sensitive economic institutions, they contend, would prevent a recurrence of this confusing allegations and ensure that "all revenues were properly and legally accounted for."

However, the senate rejected the committee's proposal to accept the N813.8 billion subsidy deductions by the NNPC from January 2012 to July 2013, since it was certified by the Petroleum Products Pricing Regulatory Agency (PPPRA) and appropriated for by the National Assembly. It instead accepted that the subsidy deducted by the NNPC to the tune of N180 billion for the fourth quarter of 2011, was also certified by the PPPRA and appropriated by the National Assembly.

The NNPC was advised not pay their operational expenditures directly from the Federation Fund without appropriation by the National Assembly. The senators in the same vein asked the oil corporation to strictly adhere to international best practises in keeping records, but cautioned that the NNPC should not control the revenue account of Nigerian Petroleum Development Company (NPDC) so as not to undermine its separate legal status and make accountability more difficult. The NNPC was also advised to ensure due process.

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Source: AllAfrica

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