- Category: Business and Economy
- Published on Monday, 03 October 2011 06:17
- Written by Admin
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The Nigerian National Petroleum Corporation lifted crude oil beyond the levels allocated to it for domestic consumption, thereby short changing the Federation Account by about N133 billion in six months, documents from the Federation Account Allocation Committee have shown.
The excess oil taken amounted to about $885.7 million (equivalent N133 billion) based on the average prices of crude oil during each of the six months.
The corporation is entitled to lift 445,000 barrels of crude oil per day only, meant to be refined and sold at home. Because the local refineries are not working to capacity, NNPC sells part of this allocation abroad and then imports refined products to meet the domestic consumption needs.
But a report prepared by the FAAC ‘post-mortem’ sub-committee ahead of a fund-sharing meeting two weeks ago showed that during the first six months of the year, except in January, NNPC lifted more than what it should and never remitted the balance to the Federation Account as required by law.
The report was signed by Mr. Useni Gangum, chairman of the FAAC Post Mortem Sub-Committee, and was presented to the main funds allocation committee on Friday, September 16, 2011.
In January NNPC lifted 11,541,26 barrels, being 2.25 million barrels short of its allocation. But in the other five months till June, the corporation overshot its limit, the documents show.
In February, the corporation lifted 13,042,899 barrels instead of 12,460,000 barrels, thereby short changing the Federation Account by 582, 899 barrels, amounting to $47,401,346.68, based on the average $81.32 per barrel oil price for February.
In March, it lifted 16,303,115 barrels instead of 13,795,000 barrels, translating into 2,508,115 barrels extra and amounting to $237,568,652.8. Average crude oil price for the month was $94.72 per barrel.
In April the additional crude lifted was 2,231,828 barrels, translating into $227,981,230, based on the average price of $102.15 per barrel.
In May, instead of 13,350,000 barrels, NNPC lifted 15,035,592 barrels and when the extra 1,240,592 barrels is converted, it shows that the corporation short changed Federation Account by $115,275,808.64. Average oil price for May was $92.92 per barrel.
In June, the NNPC lifted 16,278,879 barrels instead of 13,350,000, amounting to $257,507,041.68, at average price of $87.92 per barrel.
When contacted, spokesman for NNPC Levi Ajuonuma said he would not be able to make any comments until he sees the documents.
At the last FAAC meeting in Abuja, members said they were worried over the short changing of the Federation Account by the NNPC.
The post-mortem sub-committee said it “deliberated on the matter and resolved that NNPC should limit its Allocation of Domestic Crude from Federation Equity Crude to 445, 000 barrels per day as over-lifting short changes Federation Crude export revenues.”
During the FAAC meeting on September 16, state governments initially rejected their allocations because of alleged discrepancies in oil subsidy figures and an unsettled N450 billion debt against NNPC. At a subsequent meeting four days later, the states accepted their allocations on the understanding that the NNPC would also repay the N450 billion debt in instalments.
Documents showed that the NNPC and the Petroleum Products Pricing Regulatory Agency (PPPRA) short changed the Federation Account by about N746.95 billion in seven months from January to July, through deductions supposedly meant for fuel subsidies.
The two agencies paid themselves well above the monthly subsidy rates approved for them by the Appropriation Act. Based on the law, NNPC is entitled to N9.08 billion per month for subsidies, while the PPPRA is entitled to N11.417 billion per month. But each of the two agencies took more than the budgeted amount every month since January. (Daily Trust)