NNPC $10.8bn oil revenue - How we spent it

The management of the Nigerian National Petroleum Corporation, NNPC, yesterday, gave a clearer account of how it spent the $10.8 billion, the remaining part of the controversial un-remitted $48.9 billion oil revenue.
The Corporation which said it spent the sum on subsidy on PMS, known as petrol, repairs of vandalised pipeline and products/crude oil losses as well as maintenance of national strategic reserves, said it enjoys legal backing to incur such expenditure on behalf of the government. The Group Executive Director, Finance and Accounts Directorate of the Corporation, Mr. Bernard Otti, while making the clarification at an interactive session with Energy Correspondents in Abuja, said that as a law-abiding corporate entity, NNPC’s processes and procedures are guided by the provisions of the law.
He said, “whatever expenditure we have incurred in the discharge of  the above national responsibilities are backed by the law setting up the Corporation”.   He said the Corporation was backed by Section 7, Sub section A and B of the NNPC Act.
Mr. Otti insisted that the $10.8 billion currently the subject of ongoing inter-agency reconciliation exercise was not missing, noting  that, “the sum in question has been expenditures incurred as part of statutory responsibilities which the NNPC as a National Oil Company executes on behalf of the Federal Government and by extension the entire people of Nigeria.”
He said the $10.5 billion reflects expenditure incurred by the NNPC in the period under review and are rarely made up of the following, subsidy claims, $8.49 billion, pipeline Management and Repair cost, $1.22 billion, products/crude oil losses, $0.72 billion, and cost of holding Strategic Reserves, $0.37 billion.
He said these are being subject to the normal continuing inter-agency reconciliation exercise. He added, “there is a process by which revenue accrue into government account, there is also government policy stating that subsidy is still in place. NNPC does not create policies but it execute s policies, the subsidy claim has simply arisen because after 2011period. We saw there was no import of petroleum products when prices had gone  up, NNPC was the sole importer and subsidy claims for this particular period had gone up. The subsidy claims normally is known to all relevant agencies.”
Mr. Otti who is also a member, Board of Directors of the Corporation added that, “It is also on record that for many years now, NNPC has been the main supplier of products to the nation. Most of these products are imported at international prices but sold at regulated prices.
At some point, NNPC was the sole importer of products into the country. The Corporation has successfully kept the nation wet with products, especially PMS, for the past three years as can be  verified from the absence of queues at petrol stations during normal and festive seasons.
“It is significant to note that the government has not made any payments to the Corporation in the name of subsidy during the period under review.
“I should like to use this opportunity to restate our position on subsidy. The subsidy is a policy of the Federal Government. We only implement what we are directed to,” he said.
Otti stressed further that “another area of huge expenditure on behalf of the Federal Government is the maintenance of national strategic reserves for petroleum products. At every point in time round the year, NNPC maintains huge petroleum products reserves on land and in the national territorial waters”

Source: Vanguard