NNPC under-remits N77.92 billion deducted from earnings

In its latest report on Nigeria’s share in the sale of crude oil and gas produced in 2017, the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed that the Nigerian National Petroleum Corporation (NNPC) under-remitted N77.92 billion out of the N297 billion deducted from earnings from the Domestic Crude Allocation as costs and losses. 

According to the NEITI, the NNPC under-remitted N77.92 billion to the Federation Account from the domestic crude allocation in 2017. 

Breakdown: The report has it that the state-oil company deducted N297 billion from earnings from the Domestic Crude Allocation as costs and losses. 

The amount was broken down into N141.6 billion for under-recovery of petroleum products, N25 billion for crude and product losses, N130.4 billion for pipeline repairs and maintenance. 

The NEITI’s report read; “The sum of N77.92 billion was under-remitted by NNPC to the Federation Account from Domestic Crude Allocation in 2017. 

“NNPC acknowledges the under-remittance and states that there is an ongoing reconciliation to net off the N77.92 billion from the ‘established federation indebtedness to the corporation of N797 billion arising from KPMG forensic audit of the corporation at the instance of the federation’.” 

NNPC’s defense: When confronted over the failure to remit what was due into the Federation Account, the NNPC claimed that it is owed N797 billion by Nigeria, comprising the Federal, State, and Local Governments. 

What you should know: NEITI revealed that a total of $14.5 billion was realised from the sale of the federation’s share of oil and gas for 2017. Of this sum, $13.18 billion was realised from crude oil sales and $1.32 billion from gas. 

According to the report, 692 million barrels of crude oil was produced in 2017. And out of this volume, the share that went to the federation was 240.9 million barrels, representing 35% of the total crude oil production for the year. 

The report has it that the federation’s crude went to 29 destinations, which include -India with 41.3 million barrels (17.12%); USA, 30.6 million (12.72%); local refineries, 26.5 million barrels (10.98%); Netherlands, 22.9 million barrels (9.5%); Spain, 21 million barrels (8.83%), amongst others. 

There has been disagreements in the past between NNPC and the Federal, States and Local Governments over the actual figures available for disbursement during Federation allocation meetings. This often results in the setting up of committees to do further reconciliation.


Source: Nairametrics

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