Nigerian Audit Report Exposes Fraud in Oil Revenue

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    The Nigerian National Petroleum Corporation (NNPC) yesterday said what it owed the Federation Account was N326 billion which is still being reconciled and not N3.23 trillion as alleged by the Auditor General of the Federation (AuGF).

    The corporation described the auditor general’s claims as erroneous and borne out of misunderstanding of how revenues from crude oil and gas sales are remitted into the Federation Account.

    In a statement obtained from the office of the Group Executive Director/Chief Financial Officer (Finance & Accounts) Isiaka Abdulrazaq, NNPC said the proceeds from the sale of 445,000 barrels per day of crude allocated to it for processing into petroleum products were remitted to the Federation Account after deducting the cost associated with the supply and distribution.

    The cost, according to the corporation, include N2.34tr being total amount of subsidy approved by PPPRA for the period of January 2012 to December 2014 with an additional N7.96bn subsidy claim which was still under reconciliation.

    It put losses from crude oil and petroleum products as a result of vandalism on its network of pipelines for the period at N202.68bn

    NNPC said it had claims of up to N1.374tr against the federation which were currently under review by the finance ministry.

    “All the stakeholders in FAAC meeting are familiar with the N326.14 billion. As regard to the N1.374 trillion claims against the federation, this is currently being reviewed by FMF appointed forensic auditors at the instance of the minister of finance,” the statement said.

    On the auditor general’s allegation that $235m proceeds from sale of natural gas was transferred to some undisclosed Escrow accounts, the NNPC denied having any such secret accounts.

    “The fact is that the alleged $235m represent proceeds from the sale of gas feedstock to Nigerian Liquefied Natural Gas Limited (NLNG) that was used to repay part of the Modified Carry Agreement (MCA) loans, applicable royalty to DPR and tax to FIRS,” it said.

    The Auditor General of the Federation, Samuel Ukura, had on Monday in an audit report presented to the National Assembly accused the NNPC of failing to remit the sum of N3.235 trillion to the Federation Account for the period ended 31st December 2014.

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