Probe of NNPC accounts begins

Oil & Gas
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The probe of the Nigerian National Petroleum Corporation (NNPC), has commenced."Yes an auditing firm of international standard has been employed to carryout the probe and they will be ready with the report within the next six weeks, by then, we will be ready to tell Nigerians the state of the accounts of the NNPC," Olusegun Aganga, minister of finance, told BusinessDay.

Aganga said the Federal Government has employed the services of an auditing firm of international standard to carryout the probe.The minister who maintained that the government was in a hurry to cleanse the NNPC accounts books noted that "when that is done, we will be able to know who has spent what and for what purposes such funds were spent". He stated that the government would give the needed support to the auditing firm to be able to carryout its work effectively and deliver the reports on schedule.

The submission of the report of the audit may herald the commencement of the much-awaited deregulation of the downstream sector of the oil and gas industry, BusinessDay learnt. President Goodluck Jonathan had on May 17, 2010 ordered a comprehensive auditing of the accounts of the troubled NNPC following claims of embezzlement and mismanagement of over N1 trillion on petroleum subsidies and other ancillary services by the corporation.

The directive brought to an end months of dillydallying over the Federal Government's decision to look into the books of the troubled NNPC and its subsidiaries over a year ago. Late President Umaru Yar'Adua had in 2009 said the government would probe the activities of the corporation, especially the petroleum subsidies that was put at over N1 trillion.Ima Niboro, special adviser on media and publicity to the president, in a statement said President Jonathan has ordered a thorough audit of the finances of the NNPC.

"The President has also directed a comprehensive audit of NNPC accounts. The finance minister is to engage the services of a world-class auditing firm to carry out the audit," Niboro said in the statement. The National Economic Council (NEC) on March 9, 2010 called for the probing of the N1.15 trillion outstanding claims of subsidy and related expenditures presented to the Federal Government by the corporation. The controversial amount of money covered payment for the goods, movement and supply of petroleum products across the country between N2005 and 2010 financial year.

Mansur Muhktar, former minister of finance, said after the meting that "right now we have an invoice from the NNPC in the amount of N1.15 trillion to the ministry of finance for various expenditures incurred on behalf of the Federal Government, including cost of crude and products lost owing to pipeline vandalism and losses incurred from supplying petroleum products at regulated prices."He said "there are outstanding claims from the NNPC to the tune of N880 billion that date back to 2005. These are claims that have not been settled. We have been doing the auditing systematically for all payments. We have an independent auditor that audits whenever the Petroleum Products Pricing Regulatory Agency (PPPRA) makes submissions, that is why the payment circle takes over 45 days. We submit it to external auditors and they bring it back to us.

"Out of this, N450 billion has not been remitted by NNPC to the federation account. This was in respect to previous months in terms of February to December 2008, where they were not able to pay. They had to make direct withholding of the money and of course there is about N700 billion or so that we are now talking about, in relation to the outstanding"."When you consider the size of the capital expenditure of the Federal Government and even the amount that we have been able to spend over a period, assuming 60 percent of the budget execution as at the end of December 2009 for a budget that is just about N1.1 trillion, that is less than what has been used for the subsidy," he said. 


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