Federal Allocation Committee to Probe NNPC Due to Delay on Remitting $1.48 billion


A forensic audit conducted by the audit firm of PriceWaterHouseCoopers on behalf of the Federal Government on the operations of the NNPC had indicted the management of the national oil company for various questionable transactions. The audit followed an allegation that the NNPC had failed to account for $20 billion oil money. While in the cause of the audit, the Nigerian Government said only $1.48 billion was found missing.

Following this, Members of the Federation Allocation Committee in a late meeting on Monday, resolved to probe the circumstances surrounding the delay by the Nigerian National Petroleum Corporation to remit the $1.48 billion (N294.5 billion) uncovered by a recent forensic audit.

The report recommended that the Nigerian Petroleum Development Company, NPDC, the upstream subsidiary of the NNPC, should refund the $1.48 billion to the Federation Account. Months after the Auditor General of the Federation, Samuel Ukura, presented extracts of the report, asked the NNPC to remit the funds, of which the FAAC said no money had been paid yet.

In view of this, a ministerial committee has been setup to investigate the cause of the delay. The Chairman, Forum of Finance Commissioners of FAAC, Timothy Odaah, told reporters after the meeting on Monday that the committee was worried that the delay was negatively impacting the revenue available for distribution among the tiers of government.

Mr Odaah said “We (states) need the money to meet their obligations,” Mr. Odaah said. “Majority of the states are yet to pay salaries of workers and contractors for projects executed. We are making a clarion call for the release of the $1.48 billion from the forensic audit of the NNPC so that we can clear our debts.”

The Chairman of the committee said, he will meet with the NNPC management to resolve all issues delaying the remittance, particularly as both the President and the Petroleum Resources minister have already directed that payment be made.

“We need that money. The Federal Government needs it. The states and local governments also need it, and if it is not released with this type of abysmal funding we have seen, it will be very terrible,” he said.

The Accountant General of the Federation, Jonas Otunla, said in his report that the revenue that accrued to the federal government during the month under review dropped by about the N86.4 billion which he attributed to the continued shutdown of trunks and pipeline at various oil terminals.

Consequently, gross revenue to the Federation Account dropped to N315.04 billion in March from the N401.46 billion in February.

The Minister of State for Finance, Bashir Yuguda, who presided over the meeting, said mineral revenue declined by N78.36 billion from N306.94 billion in February to N228.58 billion in March.

Non-mineral revenue, he said, also dropped by N86.42 billion, from the February figure of N94.52 billion to N86.46billion.

The communique disclosed that there was an increase in the average crude oil price per barrel from $48.65 to $55.34 during the period, resulting in an increase in revenue by $43.73 million during the period.

The statutory allocation for the month dropped as distributable revenue to the three tiers of government dropped by to N435.06 billion from the N522.05 billion shared in February.

The Federal Government received N146.48 billion for the month, representing 52.68 per cent, while the states and local governments received N74.29 billion and N57.28 billion, respectively.

The oil producing states took home 13 per cent of the total revenue as derivation revenue.