Finance Ministry denies knowledge of alleged NNPC’s $3.5bn subsidy fund

Posted by admin Latest Politics, Oil Politics Wednesday, November 7th, 2018

The Federal Ministry of Finance Thursday, denied knowledge of a $3.5 billion- fund allegedly kept and utilised by the Nigerian National Petroleum Corporation (NNPC) for fuel subsidy.

The Permanent Secretary, in the ministry, Mr Mahmoud Isa-Dutse, gave its position when he appeared before the Senate ad hoc committee probing the allegation in Abuja yesterday.

Isa-Dutse’s claim appeared to corroborate the Group Managing Director of the NNPC, Mr Maikanti Baru, who restated the agency’s denial that it had no such fund in its custody.

The allegation emanated from the Minority Leader of the Senate, Abiodun Olujimi, at plenary on October 16.

In a point of order, Olujimi had alleged there was a $3.5 billion “Subsidy Recovery Fund being managed only by the GMD and Executive Director, Finance, of the NNPC”. It was on the basis of that allegation that the Senate set up the committee, chaired by the Majority Leader, Sen. Ahmed Lawan.

But in his defense, Isa-Dutse said the ministry was only aware of the outstanding payments under the old subsidy regime, being handled by the Debt Management Office (DMO).

“As far as the current fuel importation regime is concerned, the Ministry of Finance does not have any account it is operating.

“We are not aware of the alleged $3.5 billion fund, and we do not maintain any subsidy fund account,” he said.

The NNPC had earlier denied the $3.5 billion subsidy fund claim in a statement on Oct. 17.

The GMD explained on Thursday that the agency was only utilising a revolving fund of 1.05 billion dollars to defray the cost of under-recovery in the importation of fuel.

Asked by lawmakers to differentiate between subsidy and the “cost of under-recovery”, Baru said subsidy was usually captured in the national budget, while the latter was not. The $1.05 billion, according to him, is part of the NNPC’s operational costs.

He said the money was sourced from the Corporation’s share dividend in the Nigeria Liquefied Natural Gas (NLNG) and domiciled in the Central Bank of Nigeria (CBN). Baru explained that the action was in line with section 7 (4)(b) of the NNPC Act, which mandated it to defray its operational costs from its revenue.

“This $1.05 billion is being administered under a steering committee that was set up, and a working committee that handles daily operations of this fund.

The GMD assured the committee that the NNPC would continue to guarantee energy security in the country by maintaining PMS supply at the approved pump price of N145 per litre, except directed otherwise.

Meanwhile the Senate Committee on Local Content on Thursday queried the lopsided shareholding structure in favour of foreign component in Halliburton Nigeria.

Chairman of the committee, Sen. Solomon Adeola, raised the concern during a tour to Halliburton Nigeria in Port Harcourt, as part of its two-day oversight visit to Bayelsa and Rivers.

Adeola queried reports that shareholding in Halliburton was 30 per cent for the Nigerian component and 70 per cent for Halliburton global.

He also deplored the fact that Halliburton Nigeria was not listed on the Nigerian Stock Exchange.

He requested the company to submit its payroll to ascertain disparity in remuneration for foreign and Nigerian workers.

Adeola also directed the company to “submit tax certificate, financial statement and other documents, to ascertain its level of compliance with local content regulation.”

He asked that company to furnish the committee with its recruitment process as well as level of involvement of local communities in the company’s activities.

Responding, Deputy Managing Director of the company, Mr Okey Okoli, assured that all the documents requested would be made available to the committee.

He said the company was 97 per cent Nigerian, with 606 indigenous staff “and only three per cent foreign”, accounting for 22 expatriate workers.

Okoli added that the company was in strict compliance with tax remittance and the one per cent remittance to the Nigerian Content Development Management Board.

He disclosed that there was no disparity in the salaries and allowances paid to indigenous workers and foreigners, adding that Nigerians who worked in foreign offices were paid “hardship allowance” like foreigners were paid in Nigeria.

“We do not have shortfall in terms of compliance with one per cent remittance to NCDMB.

“Our shareholding structure is 70 per cent global and 30 per cent local.

“In terms of capacity-building, we noticed a challenge for local companies to train Nigerians abroad, so we opened a training centre in Akwa Ibom state,” he said.

Okoli,who is also Country Business Development Manager Nigeria, West Central and East Africa Area of the company, however, noted that the training was mainly in oil and gas.

-Sunwp_posts