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Refund $218m To Federation Account, Senate Tells NNPC

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Teddy Oscar, Abuja

The Senate on Thursday told the Nigerian National Petroleum Corporation (NNPC) to refund the sum of $218,069,354.32 to the Federation Account.

This was sequel to the adoption of a report of its Committee on Finance, which was contained in a 73-page report of the Senator Ahmed Makarfi-headed committee, which investigated the alleged unremitted $49.8 billion by NNPC.

The amount is the balance of the gross lifting under the third party financing.

While considering the report, the Senate, however, unanimously rejected item eleven of the committee’s recommendations, which asked the Federal Government to remove the subsidy on petroleum products because of the alleged misapplication of billions of dollars being voted annually for the scheme.

The lawmakers also directed that inter-agencies reconciliation meetings between institutions such as the Federal Ministry of Finance, NNPC, CBN and the Federal Inland Revenue Service (FIRS) should be done on regular basis to block potential problems emanating from such communication lacuna.

It said that such regular meetings among those sensitive economic institutions would prevent a recurrence of this situation and ensure that all revenues were properly and legally accounted for.

The Senate accepted the subsidy deducted by NNPC in the sum of N180 billion for the fourth quarter of 2011, which was also certified by the PPPRA and appropriated by the National Assembly.

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It, however, rejected the committee’s proposal to accept the N813.8 billion subsidy deductions by the NNPC from January 2012 to July 2013, since it was certified by the PPPRA and appropriated for by the National Assembly.

The Senate advised that NNPC should not pay its operational expenditures direct from the Federation Fund without appropriation by the National Assembly.

It asked the oil corporation to strictly adhere to international best practices in keeping records.

The Senate further cautioned that NNPC should not control the revenue account of Nigerian Petroleum Development Company (NPDC) so as not to undermine its separate legal status and make accountability more difficult.

It also advised the NNPC to ensure due process and diligence in its operations, and urged the Senate to urgently pass the Petroleum Industry Bill (PIB) into law so as avoid the mistakes of the past.

In his concluding remarks, the Senate president, David Mark, commended the committee for presenting a courageous report based on the facts that were presented to it, stressing that members were forthright by paying attention to details in the course of their assignment.

“At the inception of the 7th Senate, I did say emphatically that there is no issue in this country that we cannot discuss as respected and distinguished senators of the Federal Republic of Nigeria. If we have the courage to set up a committee, nothing will stop us from taking the report of that committee, and nothing will be swept under the carpet in this Red chamber.

“I think what is common glaringly from this report is that we are all guilty. If the committees expected to carry out over sight functions on the NNPC were doing their job very well, we wouldn’t have needed the governor of Central Bank (of Nigeria) to ring an alarm bell before reacting.

“Whether the alarm is genuine or not, is another matter. The executive may have good reasons, but the legislature obviously does not have reasons not to find out. Let me appeal to the various committees to endeavor to do their work.

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“Facts are different from rumours, and what we have before us are the facts based on the interview conducted by the committee on public hearing and on all the documents that they could put together. One thing is very obvious,  due process has not been followed and they have stated so very clearly,” he said.

On resolution of the senate not being adhered to, Mark put the blame on the legislature, saying that the Senate had a task to enact a law that would enforce compliance to its resolutions on the executive arm.

“We would have to be supported by 2/3 majority. If we have to do so, we have to enact a law that would make resolution binding it is not something that could be done by voice vote.

“Whether it is funds yet to be remitted, funds yet to be reconciled or funds yet unaccounted for or missing, I think we should not play politics with it because, if we described it as missing or unaccounted for, the issue is that there is a reconciliation going on.

“When you outrightly said it is missing, then you have concluded. The point I am trying to make is that we should not conclude when the process of reconciliation is still ongoing,” he added.

On the issue of subsidy, Mark appealed to his colleagues not to do or say anything that would pitch themselves against the public opinion.

“If subsidy has to be removed, there must be public enlightenment and education so that facts would be made available to the people and then public opinion at the end of the day will count.

“If we sit here now and said remove subsidy, I think those who are benefitting from subsidy are very powerful and tomorrow they would influence media report and twist it to create an impression that Senate is anti people.

“If the subsidy has to go, I don’t have problems with that but let us sensitise the people over a very long period of time so that everybody will be carried along and everybody will on board and we then we can take a final decision on the issue of subsidy because the recommendations are far reaching,” he said.

Earlier in his contribution, Senator Ayogu Eze, commended the committee for the professional work carried out by them especially when they decided to hire professional auditors which made it possible for them to come up with such a discreet report.

He said it was highly amazing that the former governor of CBN, who was supposed to know the facts was misleading the country by giving conflicting reports.

The legislator stressed the need for cooperation of all agencies who are in charge of resources acruable to the country from the petroleum sub-sector and noted that they were working at cross purposes and there was lack of adequate communication among them.

He suggested that the country should do away with subsidy and that those who had been found to have enriched themselves illegally through the proceeds from oil sales, should be  punished.

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Senator Ahmed Lawan described the development as a wake up call not only for the executive but for the legislature.

He noted that the lawmakers saddled with the responsibility of carrying out oversight on the activities of the NNPC seemed to have gone to sleep while government appointees were busy spending public funds without seeking the approval of the National Assembly.

Senator Heineken Lokpobiri said that subsidy was encouraging corruption and called on the executive arm of government to probe the subsidy regime, and also remove it from the system.

He said the report that established that no $49.8 billion was missing and that the amount discovered not to have been fully reconciled would be taken care of in the forensic audit report still being carried out.

Senator Abdul Ningi, lamented that the report had revealed a lot of corruption in the oil sector and how the NNPC spent money without appropriation or recourse to the provisions of the constitution.

He disagreed with Eze, and Lopobiri, who called for the removal of the subsidy regime, arguing that the poor masses, who could not cope with the adverse effect of the removal would suffer too much.

Senator Smart Adeyemi said the allegations of missing funds was made to score some political points by the former CBN governor, and called for a synergy among the agencies handling the oil funds.

“On the issue of subsidy, it is the only thing that is left for the country; those who had been accused of abusing the subsidy should be prosecuted because I will not support the subsidy removal.

“At the same time, the nation’s refinery because those behind the continued non functional state of the refineries are those, who were implementing the subsidy regime. We need to know the names of the directors of companies, who are enjoying subsidy,” he said.

Senator Kabiru Marafa, suggested that the report be further studied by the members, stressing that the report was perfectly carried out without political bias.

He, however, said those indicted by the report should be sanctioned in line with the transformation agenda of President Goodluck Jonathan-led Federal Government.

“Justice must be uniform. Since the leadership of the Central Bank of Nigeria was asked to stay aside, those of the NNPC and the Ministry of Finance were not sanctioned,” he added.

Senator Helen Esuene, argued that the joint venture in Nigeria oil and gas was not necessary, noting that it was counter productive.

She said private operatives should be allowed to work while government collect royalties.

She equally wondered why Nigerians could not build refineries in Nigeria but had to travel abroad to build refineries.

She said the country should rather subsidise production of the product instead of subsidising the finished product.

Senator Mohammed Tukur, advised that the committee should be allowed to do further work and recommended that the agencies managing the money should be made to suffer punishment for their deeds.

Senator Solomon Ewuga, in his contribution, suggested the immediate passage of PIB in order to effectively tackle the multifarious challenges in the industry.

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