NEITI calls for investigation of $15.8 billion NLNG dividends
The Nigeria Extractive Industries Transparency Initiative (NEITI) has called on the Federal Government to institute an independent investigation into the status and utilisation of all dividends and loan repayments by the Nigeria LNG Limited (NLNG) to the Nigerian National Petroleum Corporation (NNPC) from 2000 to 2014.
The Executive Secretary of NEITI, Waziri Adio, made the call in Abuja, while answering questions on NEITI’s policy brief that examined unremitted funds, economic recovery and oil sector reforms.
He said the NLNG paid $489.226 million, about N151.6 billion in various forms of taxes to the Federal, States and Local Governments in 2016 alone. NEITI in the policy brief stated: “Since the Federation’s shareholding in NLNG is held through NNPC, dividends are paid to NNPC, which should remit same to the Federation. However, NEITI’s audits have revealed that until 2015, NNPC failed to remit the interests and dividends from NLNG to the Federation Account.”
Adio also told journalists that the total outstanding dividends and loan repayments by NLNG to NNPC not remitted to the Federation account stand at over $15.8billion. He noted that these payments were traced to NNPC accounts by its independent auditors but observed that there was no trace of NNPC’s remittance of the money to the Federation Account as required by sections 80(1) & 162 (1) of the Constitution.
On domestic crude allocation and management, the NEITI scribe expressed concerns that earnings from daily allocation of 445,000barrels for domestic use have not been properly accounted for.
“First, the refineries have been operating at below full capacity for a long time and currently process less than 100,000 barrels per day. Between January 2015 and September 2016, NNPC lifted a total of 245.4 million barrels of crude oil for domestic use. Out of this total, only 24.7 million barrels were delivered to the refineries. This represents a mere 10.06% of the total crude oil lifted for domestic use for that period. The remainder of this allocation was exported through a variety of channels: 64.8 million barrels or 26.4 per cent were exported directly; 97.6 million barrels or 39.77% were sold under the Offshore Processing Agreements (OPA); and 58.29 million barrels or 23.75 per cent were sold under the Direct Sales- Direct Purchase (DSDP) scheme.”
Concerns raised in NEITI’s audits and by other stakeholders about the inefficiency of these arrangements, especially the OPA, led to the discontinuation of the OPA in April 2016. However, “NEITI audits have shown that earnings from transactions arising from domestic crude allocation have not been fully remitted to the country’s treasury. Between January 2012 and July 2013, total revenue for domestic crude sales was $28,215,731,691 but NNPC only remitted $14,542,654,329.”
While calling for measures to recover over $14.5 million so far discovered in its reports, Adio insisted on an urgent review of this arrangement to avoid huge revenue losses and leakages.
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