NNPC Special Press Release: $10.8billion Not Missing

We are therefore constrained to respond and clarify the issues once again to help those who do not yet understand the clarification made earlier by the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala; Minister of Petroleum Resources, Mrs.  Diezani Alison-Madueke; Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi; and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Engr. Andrew Yakubu at a joint press conference which was widely reported in the media.

For the avoidance of doubt, there was no where it was stated or admitted by any of the parties in the course of the press conference or anywhere else that the sum of $12bn or $10.8bn out of the alleged unremitted $49.8bn is“ missing’’.The truth of the matter is that as at the time of the press conference, $30bn of the alleged unremitted oil revenue had been reconciled by all the parties involved. Dr. Okonjo-Iweala did explain that the reconciliation was an ongoing process and that the balance of $10.8bn is still being reconciled.

At no time did anybody, neither the Coordinating Minister of the Economy nor the CBN Governor, say that the outstanding $10.8bn was “missing’’. It is simply curious how some section of the media are not prepared to see the difference between the two positions – reconciliation in progress versus money missing. These two positions are simply not the same thing no matter the angle from which anyone chooses to see them.

Having made that point, it is also pertinent to further clarify that NNPC as a national oil company is saddled with certain onerous responsibilities that other oil companies are freed from. For instance, as the supplier of last resort, NNPC has the responsibility of ensuring that there is adequate supply of petroleum products whether the market is favourable or not. The yet to be reconciled $10.8bn can be located in the expenses on some of the responsibilities which the Corporation carries out on behalf of the Federal Government with respect to the domestic crude oil utilization.

One of such issues is the unpaid subsidies on kerosene and premium motor spirit (PMS). It would be recalled that Dr. Okonjo-Iweala was earlier in 2013 reported to have stated that she has not paid any subsidy on kerosene since she assumed office. The truth of the matter is that since 2007 when the late former President Umaru Yar’Adua reviewed the prices of petroleum products following the general strike in protest against the price hike by his predecessor, the issue of subsidy payment on kerosene was left hanging and NNPC was mandated to continue to sell the product at a subsidized rate of N50 per litre.

Since then, not a dime has been paid to the Corporation as subsidy on the product. It is also on record that since January 2012 NNPC has been importing the bulk of the PMS used in the country. NNPC has successfully kept the nation wet with products, especially PMS, these past two years as can be verified from the absence of queues at petrol stations during the end of year festivities. So the Corporation is left to bear these responsibilities on behalf of the Federal Government and these costs are part of the yet-to-reconciled balance.

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 in the national territorial waters as a result of pipeline vandalism which has made access to most of the inland storage facilities impossible. Though all hope is not lost in this regard as the Corporation has since launched an aggressive depot rehabilitation and pipeline recovery exercise with amazing results so far.

However, for the purpose of strategic reserve, at the rate of 40 million litres of PMS national consumption per day, NNPC maintains about 32 days’ sufficiency of petrol. The cost incurred in this mandate is also part of the $10.8bn yet-to-be-reconciled outstanding figure.

A third component is the cost of pipeline vandalism and oil theft. These are security issues. While we acknowledge that successive governments and their agencies like the military, police, NSCDC etc have been trying hard to create an enabling environment for the protection of our key infrastructure, including pipelines jetties, depots etc, the sheer volume of vandalism and theft is just enormous. Our over 5000 kilometers of pipelines have been prone to incessant attacks. The cost of repairs each time the pipelines are hacked is also an issue. All these make up the yet-to-be-reconciled balance of $10.8bn.

All the parties involved in the reconciliation process are aware of these facts and the figures are being thoroughly scrutinized. At the end of the day, they will make their findings public as they did last time. It is therefore incorrect for anyone or medium to continue to misinform the public that the sum of $10.8bn or $12bn of oil revenue is “missing’’.

It is important for public commentators and the media to stick to the facts and avoid undue sensationalism in the process of analyzing and interpreting the news. Our commentators owe our dear country a duty to avoid misinforming and misleading our people so that together we can move Nigeria forward.

Once again, we restate the fact that “No money is missing.’’