N’Assembly queries NNPC’s N48bn excess expenditure

Posted by admin House, Legislature, Oil Politics, Senate Wednesday, December 19th, 2012

The National Assembly Joint Committee on Petroleum
(Downstream) on Tuesday raised the alarm over the N48bn excess
expenditure by the Nigerian National Petroleum Corporation in its 2012
operations.

The committee is also calling for information on
undisclosed NNPC reserves from which the government-owned oil
corporation drew funds to augment its expenditure during the year.

The committee in the course of members’ complaints
about the “vagueness” of documents presented by the NNPC officials in
defence of the corporation’s performance in 2012 had spotted a
discrepancy between what the committee earned as income and what was its operational expenditure for the year.

Chief Strategist of the NNPC, Dr. Tim Okon, had told
the committee that the corporation made a total of N2.36tn between
January and September, 2012 while it posted N2.4tn as total operational
expenditure for the same period.

Okon said the projected revenue for the period was
N4.02tn at 59 per cent performance, but noted that the full year
performance was expected to be N3.23tn.

He explained that the 2012 performance plan for the
three refineries had been for the refining of 44million barrels, but
only succeeded in refining 23million barrels out of a total annual
allocation of 162million barrels.

He said the 162million barrels projected for 2012 was
an aggregate of crude oil allocation to the NNPC at 445,000barrels per
day.

He further noted that a total of 10.1billion litres were refined out of the total expected 18billion litres for the same period.

But the committee rejected the budget presentation,
saying that it was a deliberate attempt by the corporation to “deceive
and confuse Nigerians” and the committee.

The committee, made up of senators and members of the
House of Representatives, said the NNPC failed to supply the details of
how it arrived at the revenue generated during the period and the
details of expenditure.

Chairman of the committee, Senator Magnus Abe,
highlighted some of the expectations of the committee, demanding further
details of the revenue profile and expenditure made in 2012.

“We cannot go on to consider the 2013 budget unless
we understand how you arrived at the total figures. Tell us what the
sources of the revenues are and how the monies were spent,” he said.

Senator Benedict Ayade had also drawn the committee’s
attention to the discrepancy in the NNPC’s expenditure and revenue
profiles.

Responding to the enquiries, Okon said, “The NNPC is a
running business and it has reserves and we got the money from the
reserves. However, he had earlier told the committee that he did not
have the details with him.

He however argued 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.”

He added that the budget of the NNPC was not to be appropriated.

Group Executive Director, Refining and Petrochemicals, Philip Chukwu, made efforts to explain the source of the extra money that made up the corporation’s total expenditure, when he said the NNPC used some of the proceeds from its activities to fund other operational financial demands during the period.

He said, “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.”

The committee, however faulted Chukwu’s position,
saying that it contradicted an earlier statement where the GED described
NNPC “reserves” as crude oil and not cash.

Abe said that it was clear that the presentation of
the corporation would not lead to any transparent consideration of the
budget, noting that the National Assembly had the powers by virtue of
Section 162 of the Constitution to appropriate funds for the NNPC.

He asked the corporation to return to the committee
with details of its budget as well as the details of the “reserves,”
adding that it must submit the actual balances in the reserves and the
approving authority of the reserves.

-Punchwp_posts