NASS probes NNPC’s N48bn excess expenditure, uncovers secret cash reserve

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BY HENRY UMORU & JOSEPH ERUNKE

ABUJA—THE National Assembly was Tuesday told that the Nigerian National Petroleum Corporation, NNPC, realized N2.36trillion between January and September, 2012, while its total expenditure for the same period stood at N2.84trillion.

Meanwhile, the Senate also discovered that NNPC was  operating a secret cash reserve  where it withdraws money to augment funds appropriated to it by the National Assembly in the budget.

Disclosing this yesterday when he appeared before the Senator Magnus Abe, PDP, Rivers South-East led Joint National Assembly Committee on Petroleum, Downstream for the 2013 budget defence, the Corporation’s Chief Strategist, Dr. Tim Okon explained that the projected revenue for January and September, 2012 was N4.02trillion.

Okon who noted that the full year performance was expected to be N3.23trillion, also told the lawmakers that the 2012 plan for the three refineries was for the refining of 44million barrels. He added that 23million barrels out of a total annual allocation of 162million barrels were refined.

The National Assembly also raised alarm over the N48billion excess expenditure made by the NNPC in its 2012 operations.

The committee which is made up of senators and members of the House of Representatives further expressed dismay and displeasure over NNPC’s inability to furnish them detailed analysis of how they arrived at the revenues they made during the period and how they spent the claimed amount.

Mark and Tanbuwal

Mark and Tanbuwal

While reviewing the corporation’s performance in 2012, the lawmakers argued that the documents presented were vague, even as they discovered discrepancies between what the Corporation earned as income and what was its operational expenditure for the year.

When the management of the NNPC could not convince the lawmakers, they had no choice than to reject the budget presentation, stressing that it was a deliberate attempt by the corporation to “deceive and confuse” Nigerians and the committee.

Chairman of the committee, Senator Magnus Abe who demanded further details of the revenue profile and expenditure made in 2012, said,  “We cannot go on to consider the 2013 budget unless we understand how you arrived at the total figures. Tell us what are the sources of the revenues and how the monies were spent.”

A member of the committee and Senate Deputy Chief Whip, Senator Hosea Ayoola Agboola, PDP, Oyo North said, “This is not a budget. A budget should contain details of revenues and expenditure.”

Senator Benedict Ayade, PDP, Cross River North, however, drew the committee’s attention to the discrepancy of the expenditure and revenue profiles of NNPC.

Senator Abe also asked, “Your expenditure is more than the revenue you received during the period. Where did you get the extra money from?

Reacting to the issues raised, Okon said, “The NNPC is a running business and it has reserves and we got the money from the reserves.”

Okon who had earlier told the committee that he did not have the details with him, told the lawmakers that the budget document submitted to the committee was not “an audited account of the NNPC. You can wait until we have a full audited account and then know whether there is a budget deficit.”

Also in his remarks, the Group Executive Director, Refining and Petrochemicals, Philip Chukwu, however tried to explain the source of the extra money that made up the corporation’s total expenditure, adding, “There are proceeds from NNPC’s oil production activities. It also funds the work in the refineries from the profits coming from the revenue streams. That is why we have the higher operational expenses.”

Abe and his Committee members while concluding the session, however faulted Chukwu’s position, as they said it contradicted an earlier statement where he described NNPC “reserves” as crude oil and not in cash. They added that it was obvious that the presentation of the corporation would not lead to any transparent consideration of the budget.

Abe who told the NNPC management that the National Assembly has the powers in line with Section 162 of the Constitution, to appropriate funds for the NNPC, said the corporation should return to the committee with details of its budget as well as the details of the “reserves.”

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