By Yemie Adeoye
THE Nigerian National Petroleum Corporation, NNPC, has denied owing the Federation Account about N450 billion, as claimed by the Nigerian Extractive Industries Transparency Initiative, NEITI.

The Group Managing Director, NNPC, Mr. Aussten Oniwon, who rose in defence, said that the Corporation has remained diligent in its monthly remittance of oil proceeds to the Federation Account in order to promote smooth operations among the various tiers of government in the country.

Diezani

Oniwon made the defence at the Public hearing by the House of Representatives Joint Committee on Finance, Petroleum Upstream, Petroleum Downstream and Gas Resources, on the alleged N450 billion debts to the Federation Account at the National Assembly Complex Abuja.

He said the Corporation has remained faithful in remitting oil revenues to the Federation Account, and was therefore, not aware of funds allegedly not being remitted into the Account.

“With regards to the request on details of funds not remitted to the Federation Account, the NNPC is not aware of funds not being remitted by it into the Federation Account from inception to date, because crude oil and gas buyers do not pay into NNPC account, but into the oil and gas proceed account managed by the Central Bank of Nigeria,” Oniwon affirmed.

With regard to outstanding debts, the NNPC GMD recalled that prior to November 2003, domestic crude was sold to the Corporation at a discount both in terms of price and exchange rate, saying that petroleum products were also sold at highly subsidized rates.

Domestic consumption

According to him, on 22 October, 2003, the Federal Government directed that NNPC should henceforth pay at prevailing international market price for the 445,000 barrels per day crude oil meant for domestic consumption. However, the petroleum products that are produced from this crude oil are sold at controlled and highly subsidized prices approved by government, hence giving birth to the subsidy regime which created a major imbalance for the market.

Oniwon argued that the impact of the lopsidedness in the regulated downstream business is usually most severe on the NNPC during the period of high international crude oil and petroleum products.

He maintained that the NNPC neither sought for loan nor obtained any from government but was asked to sustain the imbalance created by the imposed subsidy policy, adding that payments for the subsidy upon which government approval were taken in the form of underpayment of crude oil cost made up for the outstanding debts.

“NNPC has been arm twisted into reaching agreement with the Federation Allocation Accounts Commission, FAAC, in respect of the N450 billion subsidy payment due to it. In order to allow peace to reign, we acceded, but we shall at the appropriate time revisit this case, to reclaim money rightly due to NNPC,” and urged the lawmakers to support NNPC’s fight for its rights.

The NNPC helmsman stated that the proceeds from the NNPC’s upstream Joint Ventures, JV, and Production Sharing Contracts, PSC, operations on behalf of the Federal Government represent a significant portion of revenues paid to the Federal Government. “NNPC is aware of the importance of these revenues to the Federation and follows strictly the laid down procedures for remittances to the Federation Account and in compliance with extant laws.”

Oniwon re-emphasized that the Corporation had conducted all its activities in full compliance with the provisions of the constitution and in line with the Appropriation Act 2011.

Responding on behalf of the members of the Joint Committee, the Co-Chairman, Hon. Peterside Dakuku, applauded the NNPC for their comprehensive submission, saying the report would go a long way in helping the committee to compile its probe report.