NNPC faults forensic report on misappropriation of $20 billion kerosene subsidy
The Nigerian National Petroleum Corporation (NNPC) has once again faulted the alleged misappropriation of $20 billion through kerosene subsidy, saying that forensic report of PricewaterhouseCoopers (PwC) on the corporation’s income and expenditure did not capture the reality.
A top management official of NNPC, who spoke on condition of anonymity while reacting to Sanusi’s recent crusade against NNPC, said that the former CBN governor initially claimed that $49.8 billion was missing and then $20 billion, then $18 billion.
According to the NNPC, the forensic report by PwC offered a fizzle rather than a bang to his cause, suggesting that the vastly smaller sum that was actually due to be paid was accountable to computational errors and subsidy over claims rather than fraud and misdirection.
The NNPC stated: “You would imagine that Sanusi would have accepted the finding of one of the world’s most experienced auditing firms, PwC. Unfortunately, he did not. Sanusi is now contesting the findings of this independent audit, which found that the NNPC actually owed just $1.48 billion due to the aforementioned errors, and has called for everyone involved in the unremitted funds situation to be charged.
“Picking through the report, the former governor blamed the NNPC for deducting costs in accordance with NNPC Act LFN No 33 of 1977. He had issue with the $2.8 billion that PwC recognised as ‘expenses not directly attributable to crude oil operations.
“However, according to the report, these costs included salaries and benefits, training courses, consultancy fees and monthly operations. As such, any clarification that would be required, as PwC mentioned, would be in how the law is to be interpreted.
“PwC, in its report, found that there was indeed a shortfall between the amount ($69.34 billion) the NNPC received from crude oil lifting and total cash ($50.81 billion) that the NNPC remitted to the Federation Account for the period January 2012 to July 2013.
“However, the report then goes on to state clearly that the ‘NNPC has provided information on the difference leading to potential excess remittance of $0.74 billion.’ In other words, NNPC actually paid more, not less, than what was due from it into the federation account!
It said that Sanusi also criticised the NNPC’s handling of kerosene subsidies, calling it a ‘scam’ that they spent $3.4 billion on a subsidy that ‘in effect did not exist’ because the late President Umaru Yar’Adua removed it in 2009 and Nigerians were paying 120–140 naira for a litre of kerosene that should have cost 50 naira if there were actually a subsidiary.
It noted that Yar’Adua’s orders were not formally presented and gazetted into law before his untimely death, so the subsidy has remained in force at the NNPC’s discretion. “In fact we all still vividly recall the uproar that erupted when the ministry attempted to indeed stop the subsidy payments, stating clearly its inability to sustain the payments. The people went up in arms with several protests and demonstrations.
“The price ‘at the pumps,’ as it were, has been determined more by the fickle nature of the international markets and the capitalist whims of the wholesalers and retailers that the NNPC sell their kerosene to at their