NNPC Can’t Account For 107 Million Barrels Of Crude, says Auditor-General
According to the Office of the Auditor-General for the Federation, the defunct Nigerian National Petroleum Corporation, renamed Nigerian National Petroleum Company Limited, failed to account for around 107,239,436 barrels of crude oil lifted for domestic consumption in 2019.
The claim was made in the office’s 2019 audit report, which is currently being reviewed by the Senate and House Committees on Public Accounts.
According to the report, between June and July 2019, around 22,929.84 litres of Premium Motor Spirit, better known as petrol, worth N7.06 billion, were pumped to the two depots (Ibadan-Ilorin and Aba-Enugu).
These are among the concerns mentioned by the office in the six audit requests sent to the NNPC.
The amount reported by the NNPC as transfer to the Federations Account and the amount reported by the Office of the Accountant-General of the Federation differed, according to the report.
According to NNPC records, the company transferred N1,272,606,864,000, while the Accountant-General of the Federation said it was N608,710,292,773.44, creating a discrepancy of N663,896,567,227.58.
As a result, the auditor-general recommended that the NNPC’s Group Managing Director be asked to explain the disparity between the two figures and submit the balance of N663,896,567,227.58 to the Federations Account or face sanctions.
According to the report, NNPC used transfer mandates to send N519,922,433,918.46 to the Federation Account.
The Auditor-General, therefore, demanded that the NNPC provides a “reconciliation statement for the difference of N88,787,862,853.96 between AGF’s figure of N608,710,296,772.42 and NNPC’s figure per transfer mandate of N519,922,433,918.46.”
The report read in part, “Audit observed that 107,239,436.00 barrels of crude oil were lifted as domestic crude, while the allocation of crude oil to refineries for a billing date of 9th January to 29th May 2019 was 2,764,267.00 bbls valued at N55,891,009,960.63.
“Information on the sale of un-utilised crude oil by refineries for 2019 was not provided, and information on crude oil allocations from 30th May to 31st December 2019 was not provided for scrutiny.”
The office said that the NNPC’s management neglected to answer to the audit enquiry, resulting in likely diversion of domestic crude, diversion of sale of un-used petroleum, and loss of Federation Account money.
The report said, “The Group Managing Director of NNPC is requested to provide the complete schedule of allocation of Crude Oil to Refineries from 1st January to 31st December, 2019, furnish details of the sale of un-utilized crude oil and reconcile it with total domestic crude oil of 107,239,436.00 bbls lifted in 2019 and remit amount realised from sale of un-utilized crude oil to the Federation Account.”
Citing Section 162(1) of the 1999 Constitution, the Auditor-General said the NNPC spent $6.410m (N1.955tn at N305/$1) to fund Joint Venture Cash Calls and other federally-funded upstream projects such as gas infrastructure development, Brass LNG, crude oil pre-export inspection agency expenses, frontier exploration services, EGTL operating expenses and NESS fee; and another N55.157bn on pipeline security and maintenance without first paying the money into the Federations Account.
The OAuGF said the GMD of NNPC should justify non-adherence to the transfer of all federation revenue to the Federation Account as provided by the Constitution and ensure that all revenue is paid into the federation account, going forward.
The report further read, “The audit examination on ‘Schedule of Inflow of Revenue’ by NNPC to Federation Account obtained from the Office of the Accountant-General of the Federation revealed that the Domestic Gas Receipts of N4.572 billion was transferred to Federal Inland Revenue Service (FIRS) Petroleum Profit Tax (PPT)-Gas in the month of January 2019, and was not made in the subsequent months of the year.
“This transfer reduced the amount due to Federation Account for the month of January, 2019 to the tune of N4.572 billion leading to possible reduction of distributable revenue in the Federation account, misapplication of funds and diversion of revenue.”
The office alleged that about 22,929.84 litres of PMS valued N7,056,137,180.00 pumped to two depots in the country in 2019 were not received by the depots, while no reason was advanced by the NNPC for the non-receipt of the product, demanding that the value of the products be remitted to the Federation Account.
239,800 bbls of crude oil valued at N5.498bn was received in Warri and Kaduna refineries, respectively, between January and December 2019, with the source of the crude not validated due to the absence of source documents, while money was allegedly classified as crude oil losses without duly completed form 146 to be processed for further investigation. Million Barrels Of Crude