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CBN, NNPC Summon by House of Rep for Not Remitting $19.25 Billion

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Both Godwin Emefiele, the Governor of the Central Bank of Nigeria, and the Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari have been summoned by the House of Representatives over non-remittance of $19.25 billion or N3.24 trillion received from the sales of crude oil in 2014.

The summon issued by Wole Oke, the Chairman of the House Committee on Public Accounts, was based on the audit queries issued by the Office of the Auditor General of the Federation for the period.

In its report for 2014, the Office of the Auditor General of the Federation said from the evaluation of NNPC mandates to the central bank on Domestic Crude Oil Sales and Reconciliation in the Statement of Technical Committee of Federation Account Allocation Committee meeting held in January 2014, it revealed that “a total sum of N3,234,577,666,791.35 was not remitted to the Federation Account by NNPC within the period under review.”

The query further stated that “Cost estimated for crude and product losses was N55,964,682,158.99, which is about 50 per cent of pipeline management cost of N110,402,541,010.88. Names of contractors, location and amount paid to each for the pipeline maintenance were not sighted for audit verification.

“Over 31 per cent – N826,506,271,231.26 – divided by N2,636,390,514,777.18 multiply by 100 per cent – of the realised crude sales for the year were earmarked as other expenses, apart from direct cost of production stated in NNPC reports for the year 2014. The breakdown of other expenses was not provided for audit.

“From the above analysis, it means that the Federation Account is losing 31 per cent (N826,506,271,231.26) being additional estimated cost from the total amount that should have accrue to Federation Account.”

The auditor-general added, “From the total revenue of N3,234,577,666,791.35 as at 14th January, 2015, payable to the Federation Account by NNPC during the year, the corporation deducted the sum of N826,506,271,231.26, i.e. N660,139,048,061.39, N55,964,682,158.99 and N110,402,541,010.88, for subsidy estimate, crude and product losses and pipeline management cost, respectively, at source thereby resulting to net amount withheld figure of N2,408,041,395,560.33 shown in the above table to the Federation Account.

“All these deductions at source by NNPC were not approved by FAAC.”

The OAuGF, therefore, requested the Accountant General of the Federation to inform the NNPC’s GMD to explain the flagrant withholding of domestic crude oil sales revenue by the corporation.

Source: Naija News

Is a foreign exchange research analyst, contributing author on New York-based Talk Markets and investing.com, with over a decade experience in the global financial markets.