"NNPCL Fails to Remit $6.9 Billion, Swaps $7.1 Billion in Crude in One Year"
In 2021, despite the Nigerian National Petroleum Company Limited (NNPCL) participating in the Direct Sale Direct Purchase (DSDP) scheme and the Muhammadu Buhari administration's increased borrowing, the company failed to remit $6.923 billion and engaged in crude swaps totaling approximately $7.108 billion. This occurred amidst a challenging environment characterized by declining revenue in the oil sector.
Furthermore, as of July 31, 2023, outstanding taxes owed to the Federal Inland Revenue Service amounted to $13.591 million. Additionally, the total outstanding federation revenue owed to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) stood at $8.251 billion as of December 31, 2022. Remarkably, NNPCL and its exploration and production subsidiary were responsible for more than 70 percent of these financial obligations.
These revelations were unveiled in the 2021 Oil & Gas Industry Report by the Nigerian Extractive Industry Transparency Initiative (NEITI).
Despite the significant sums recorded as subsidies for Premium Motor Spirit (PMS) in trillions of naira, approximately 47 other oil companies also failed to fulfill their financial obligations to the government, amounting to $1.342 billion.
The report examined the operations of more than 69 companies, with 22 of them meeting the criteria for reconciliation. These 22 companies accounted for 95.65 percent of the total payments made by all companies, totaling $11,332,792.48.
In 2021, the Nigerian National Petroleum Company Limited (NNPCL) deducted N751.11 billion ($1.94 billion) from the Domestic Crude Account before remitting it to the federation. However, this amount was not due for payment as of December 2021. Additionally, there was an outstanding liability of N334.87 billion ($871.15 million) as of December 2021.
According to the report, a total of N1.20 trillion ($3.15 billion) was deducted from domestic sales proceeds as a subsidy, with N16.20 billion attributed to crude and product losses. Additionally, N22.05 billion was allocated for pipeline repairs and maintenance, while N6.15 billion was allocated for strategic stock holding.
NEITI has strongly urged for a comprehensive investigation into the activities of both NNPCL and the Nigerian Petroleum Development Company. Furthermore, NEITI has called upon other companies to promptly settle their outstanding financial obligations, while emphasizing that relevant government agencies should intensify their efforts in debt recovery.
NEITI has also raised concerns about Section 64 (m) of the Petroleum Industry Act (PIA), which designates NNPCL as the supplier of last resort and stipulates that all associated costs should be covered by the federation. NEITI argues that this provision is susceptible to misinterpretation, as evidenced by past practices involving deductions from revenue sources.
Leave A Comment