10 Years Budget: NNPC Fails To Comply With Senate's Order

ABUJA, July 25, (THEWILL) - The NNPC has failed to submit all the documents required by the Senate Committee on Petroleum Upstream Sector led by Senator Lee Maeba.

The Committee had given NNPC till 12 noon on Thursday, July 22, 2010 to submit the following documents; Annual budget for the past ten (10) years, signature of the person that approved the budget for ten years, breakdown of the N1.5 trillion naira petroleum subsidy claims which the Group Managing Director of NNPC confirmed were also used to set up DPR and a Sugar Company.

The GMD had on Wednesday assured the committee which included Senator Bode Olajumoke, former Kaduna State Governor Senator Ahmed Makarfi and former Jigawa State Governor, Saminu Turaki that the corporation would come up with the documents on Thursday.

A member of the committee confirmed to THEWILL that the requested documents were yet to reach the committee secretariat as at 1.00pm on Friday, more than 24 hours after the deadline issued by the committee.

The NNPC boss, who had last Wednesday appeared before the Joint Senate Committees on Petroleum Upstream and Downstream, said the corporation’s travails were orchestrated by many Nigerian past leaders who took money from the NNPC without following due process.

Oniwon, who appeared before the Joint Committee alongside the Minister of State for Finance, Mr. Remi Babalola said that the Federal Government owes the corporation the sum of N1.5 trillion naira.

He further stated that though the corporation could pay the sum of N450 billion it owed the Federation Account, it could not do so because the government itself owed the NNPC N1.5 trillion naira.

He said that some former Nigerian leaders actually violated due process in managing the NNPC.

According to him some of the former leaders directed the NNPC to give funds to different agencies without the clearance of the National Assembly, adding that the various payments accumulated to N1.5 trillion naira, which the corporation is claiming.

The GMD also stated that one of the past leaders instructed the NNPC to release the sum of N651 million naira for the take off of the Department of Petroleum Resources (DPR) when it was established and that the funds were never refunded.

He disclosed further that NNPC was asked to release another $18 million for the use of an unnamed sugar company and that the funds were never refunded.

In the letter written to FAAC, and which was addressed to Babalola, the corporation stated that "NNPC is facing financial difficulties evidenced by amongst others, the inability to pay for domestic crude as at when due and delays in settling bills for fuel imports; the financial difficulties essentially stem from disequilibrium between costs and cash inflow streams; that the corporation is owed substantial amounts as un-reimbursed subsidy on petroleum products.

"NNPC spends increasing sums of money in repairing/replacing vandalized assets and is suffering from products loses arising there from; the cost of holding strategic reserve of petroleum products on behalf of the Federal Government including demurrage are borne by NNPC.

"NNPC is insolvent as current liabilities exceeded current assets by N754 billion as of December 2008 and so; NNPC is incapable of repaying the N450 billion owed to the Federation Account unless it is reimbursed the N1.156 trillion from the Ministry of Finance."

A copy of the letter was submitted to Senator Lee Maeba who headed the Joint Committee. The disclosure shocked the Senators who asked the corporation to present its annual accounts since 1999.

The Minister of State for Finance, Mr. Aderemi Babalola had earlier told the Senators that the NNPC had first deducted the sum of N85 billion naira from the Federation Account, with a promise to pay back the following month.

He said that instead of refunding the said sum, the corporation went ahead to withhold more funds.

He said, "At that time, we all believed that the cash flow problems would only last for a short time."

The Minister denied knowledge of Federal Government’s indebtedness to the NNPC to the tune of N1.5 trillion naira, adding that the Federal Ministry of Finance always released funds meant for payment of petroleum subsidy.