Governors Accuse NNPC of Failure to Remit Oil Royalties

•  Dismisses corporation’s claim of 60m litres consumption of petrol daily as   falsehood
• NEC orders closure of fuel stations close to borders

Omololu Ogunmade in Abuja

Governors under the aegis of the Nigeria Governors’ Forum (NGF) last night accused the Nigeria National Petroleum Corporation (NNPC) of failing to remit royalties as stipulated by the extant laws.

Making this accusation after a meeting of NGF with Vice-President Yemi Osinbajo in the State House, NGF chairman and Zamfara State Governor, Abdulaziz Yari, said whereas NNPC ought to remit 17-24 per cent of the value of each barrel of crude oil, it has always acted in violation of this provision.

According to him, NNPC is required by the Petroleum Act to pay royalties to Department of Petroleum Resources (DPR) and remit the remaining amount to the Federation Account.
Yari, who said the governors also dismissed claims of consumption of 60 million litres of petrol per day, insisted that the claim was untenable.

He lamented that despite efforts by the federal government to eradicate the subsidy regime, it has resurfaced again, adding that DPR had been ordered to shut down any petrol station that is 10km from the nation’s borders.

“This is the second time we are meeting with NNPC in respect of remittances into the federation account. And, governors and the federal government are not satisfied with the way remittances are being made because there are so many questions raised on Nigeria, most especially on the 425,000 barrel domestic and 180,000 barrel component of Nigeria from the joint venture partners.

“We met last week the NNPC and we came and briefed our chairman of the National Economic Council. We raised three issues – one, the issue of royalties. Each and every barrel taken out of the country there is either 17 or 24 per cent of it as royalty and there is 17 or 20 per cent as tax.
“So, our main concern is that the DPR, said the NNPC is not remitting any payment of royalty, what they do is that they transmit direct from the NNPC to the federation account which is not allowed by the law.

“According to the law that established the DPR, section 196 of the Act, said all the royalty should be paid to DPR and then transmit to the federation account, which is not.

“So, we discussed today and we have sorted those ones out. The NNPC will not transmit to federation account with clear distinction that this amount is for royalty and X amount is for taxes, and X amount is profit from the sales. So, we achieved that.

“At the same time, NNPC is making payment on behalf of Nigeria on cash-call contribution and also the NNPC is making payment of cash call arrears of Nigeria’s contribution. But, our main concern is that in 2015, they said about $16.8 billion which was outstanding was not paid by the last administration and they negotiated it down to $5.1 billion according to them.

“What we said specifically is that they should bring to us how much they have paid from 2015 to date and what is outstanding. And we directed them to stop payment until the claims are proven and then we can give further directives. That too was achieved.

“On the issue of cost recovery otherwise called subsidy, the issue of subsidy resurfaced again after the efforts of Mr. President. Before now, oil was $40 per barrel and now it is about $78 a barrel.

“So, they are depending largely on importation. Therefore, the cost is higher than what they are selling at the filling station and they need more money. When there was no cost recovery, the NNPC clearly gave us the number of 33 and 35 million litres per day as the consumption of Nigeria. But now that with the new regime of cost recovery, NNPC is claiming daily consumption of 60 and 65 million liters per day which we rejected and said no.

“So, many of our international partners are saying that even if we are feeding Nigeria, Cameroon, Ghana and Niger, we cannot consume more than 35 million litres per day. So, we are wondering where the 60 million litres is coming from. So, we are trying to sort that one out, that one is not yet resolved.

“But, we are now taking a very hard decision, that because NNPC said the reason why they were lifting 60 million per day is because our borders are porous. So we have taken the decision that any filling station that is 10 kilometres on the border side should be closed by DPR. And, then we will do recertification according to the needs.

“Secondly, we have directed the Minister of Finance in collaboration with the DPR and the NNPC to our tracking devices on every truck in other to monitor where they are discharging the fuel.
“Because, we are suspicious of the number, we cannot confirm the difference from 30 million litres per day consumption to 60 and 65 million litres per day consumption. So, these are our decisions on the NNPC,” he said.