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Reps' panel summons NNPC, PPPRA, DPR chiefs over oil sales

By The Citizen
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The House of Representatives Committee on Public Account Committee (PAC) Monday asked the Inspector-General of Police (IGP), Mohammed Abubakar, to arrest the Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Andrew Yakubu, the Executive Secretary, Petroleum Products Pricing Regulatory Agency (PPPRA), Mr. Reginald Stanley and Director, Department of Petroleum Resources (DPR), Osten Oluyemisiola, and bring them before it Tuesday.

They are to answer questions relating to queries raised by the Office of the Auditor-General of the Federation on the management of monies realised from oil sales.

Chairman of the committee, Solomon Adeola who announced this at the committee's meeting, said its efforts at verifying the truth of the queries raised against these agencies had been frustrated by the alleged refusal of their bosses to appear before it despite several invitations.

He read the allegations contained in the Auditor-General's 2007 queries, which concerned the three government agencies, lamenting that such allegations were too serious to be ignored.

Adeola also stated that his committee would not allow any of those allegations 'to be treated under the table'.

Some of the allegations as contained in the audit queries as read by Adeola, which the NNPC management alone was invited to respond to, are:

• During the audit examination of the records maintained for the Federation Account at the NNPC and the PPRA, it was observed that the subsidy on petroleum products paid and deducted at source by both PPPRA and NNPC respectively exceeded the actual amount budgeted in 2007 Appropriation Act which provided the sum of N50 billion for the payment of subsidy on petroleum products.

This matter has been brought to the attention of the Group Managing Director (NNPC) and the Executive Secretary (PPPRA) through the Accountant-General of the Federation for their comments.

• Audit examination of the accounting and other records revealed that NNPC deducted at source the sum of N236,941,070,020.09 as petroleum products subsidy. This, when compared with the sum of N216,295,656,760.00  approved by PPPRA for the Corporation, gave rise to over-deduction of N20,345,413,254.09. The discrepancy has been brought to the attention of the Group Managing Director (NNPC) through the Accountant-General of the Federation for clarification, among others.

The queries for the DPR include:
• During the audit examination of accounting and other records at the Department of Petroleum Resources, for the Federation Account Revenue, it was observed that the computation of royalties payable by the oil companies was based on actual crude oil lifted by them and not calculated on actual production figures contrary to the provisions of the Memorandum of Understanding (MoU) with the relevant oil companies. The MoU provide that payment of royalties should be based on production volume multiplied by the prescribed royalty rates.

• Furthermore, the DPR has since shirked its responsibility of raising the assessments on royalties and sending the demand notices to the various oil companies for prompt settlement.   Rather, the oil companies are allowed to engage in self-assessment of royalties payable by them. This compromise obviously is detrimental to the interest of the country. The DPR has been informed of this anomaly through the Accountant-General of the Federation, and he was requested to ensure that computation of royalties is based on the production as contained in the MoU for the benefit of the country, among others.