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Missing $20bn Dollars: Who Said What--NNPC And Diezani's Recklessness

May 16, 2014

Nigerians shall continue to demand for the whereabouts of the missing $20billion despite desperate efforts being made to stifle the investigation or compromise the report.

Please, kindly find below the submissions of the major stakeholders on the missing $20billion oil revenue:

“We established that the NNPC shipped about $67bn worth of crude and about $47bn came back to the Federation Account; so, there is $20bn unremitted. The Finance Minister had explained that there was $6bn that the NNPC said it shipped on behalf of the NPDC.  There is the $2bn third party finance and the balance of $12bn from our books, and even from the NNPC submissions, it is what is outstanding from the domestic crude of $28bn that was exported by the Nigerian Petroleum Development Company. As far as the CBN is concerned, the most important point to establish is that there is a difference of $20bn between what the NNPC shipped and what it repatriated."

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"We have presented documents from the PPPRA and the Presidency that, in our view, there is no subsidy on kerosene first of all, and that the payment of kerosene subsidy is a violation of a written presidential directive.”

CBN Governor, Mr. Sanusi Lamido Sanusi

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“It should be emphasized that the issue of unremitted funds by the NNPC is not new; it has been an ongoing issue at every Federation Accounts Allocation Committee meeting chaired by the Ministry of Finance, as evidenced by reports from the monthly meetings. As of December 2013, the cumulative un-reconciled figure of shortfalls from NNPC payments stood at N1.792tn, or about $11bn.

On the original $10.8bn, which was the shortfall we had as of July 2013, another reconciliation meeting was held at which NNPC presented data of how it utilized the balance of $10.8bn, namely: amount withheld for subsidy, $8.766bn; holding cost of strategic reserves, $0.4599bn; crude oil and product losses, $0.761bn; and pipeline management cost, $0.905bn, for a total of $10.89bn. The data presented were all certified by the PPPRA as being accepted. We asked to see the backup documentation to enable verification. Our judgment is that a proper examination of these documents requires technical expertise beyond the capacity of the reconciliation team, and, therefore, we believe we should have an independent forensic audit managed independently of these submissions.”

Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala.

"Our own forensic examination of the document will make us take a decision as to whether the documents support the expenses incurred. We have also received certification for kerosene subsidy but the key issue is the appropriation to it and we have all agreed here that no appropriation has been made for it. The implication of spending money that is not appropriated is well known to everybody and the whole world is hearing this. I don’t want us to joke or play with this. It is the most central issue. All agencies that have spoken have confirmed to the whole world that this money was not appropriated and I want people to absorb the import of this confirmation. We will deliberate on how to deal with the past. How we will deal with the future is critically important and this is the best time to deal with the issue to avoid further contravention.”

Chairman, Senate Committee on Finance, Senator Ahmed Makarfi.
It is clear from all the documents available in public domain that the basis for the directive to eliminate subsidy was straight forward and unambiguous: there was no subsidy, as Nigerians were nowhere purchasing kerosene at the subsidized rate. The Federal Government recognized that kerosene subsidy was “economic rent”, a racket in which NNPC bought kerosene at N150/litre, sold to marketers at N40/litre knowing well that the retail price was more in the region of N170 – N250 litre. The margin of 300% - 500% over purchase price is economic rent, which never got to the man on the street. In dollar terms, every vessel of kerosene imported by NNPC with Federation money cost about $30m and it was sold for $10m or $11m, generating rent of $20m/vessel to the syndicate.

From the foregoing, the following issues are germane:

  1. Non-remittance of proceeds to FAAC.
  2. Violation of a Presidential directive, and
  3. Paying subsidy on a product that is not subsidized.

The big question then is: On what basis did NNPC pay itself billions of dollars as subsidy for kerosene in view of the presidential directive?

Also, the NNPC claimed that no deductions for subsidy were made after March 2012, so how did $8.49 billion subsidy explanation come about?

If NNPC was deducting fuel subsidies after March 2012, why did it deliberately render false returns and deny the deductions for 20 months (April 2012 - Dec. 2013)?

Nigerians shall continue to demand for the whereabouts of the missing $20billion despite desperate efforts being made to stifle the investigation or compromise the report, as Nigerians are determined more than ever to bring NNPC and the Minister to render proper account for the stolen money.

Finally, Mr. President, is this not enough financial recklessness to warrant the sack of Minister of Petroleum, GMD of NNPC and every other culprit involved in the fraud? Nigerians are watching with keen interest!

Comrade Timi Frank

The views expressed in this article are the author’s  own and do not necessarily reflect the editorial policy of SaharaReporters

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