The Nigerian National Petroleum Corporation (NNPC) Wednesday said it had been unable to remit revenue to the Consolidated Revenue Fund (CRF) in the last four years because the corporation had suffered heavy losses during the said period.
The corporation claimed it incurred operational losses to the tune of N384.9 billion between 2009 and 2011. But the House of Representatives Committee had rejected the explanation, describing it as “unacceptable.”
The Group Executive Director of the NNPC, Mr. Bernard Oti, gave the explanation Wednesday, at a meeting with the House Committee on Finance.
The meeting was convened to give the NNPC an opportunity to make its final presentation on the accusations of non-remittance of revenue levelled against it by the National Assembly.
The NNPC, Oti said, incurred huge costs in meeting its statutory functions and other assigned roles in the overall interest of the nation. In the process, the corporation said, it ran into quantum losses in terms of pipeline vandalism, crude oil theft and un-recovered subsidy claims.
“Huge losses of crude oil and petroleum products due to syndicated thefts and vandalism, the cost of which the corporation bears. The repairs of the vandalised pipelines which is expensive and funded from the corporation’s cash-flows to ensure that products supply is maintained throughout the nation and the economy is not adversely affected.
“The corporation also incurred demurrage as a result of pipeline vandalism, which made it difficult to pump products through the pipelines system in addition to the huge investments that NNPC made in the national pipeline network. It also bears the cost of maintaining strategic reserve to ensure national energy security. This is a crucial role, which impacts on all other areas of the economy, security, social stability and power,” he said.
According to him, the return on investment on the corporation’s refining, distribution is so minimal that the NNPC had no surplus for transfer to the Consolidated Revenue Fund.
He appealed to the House to exclude the NNPC from the schedule of corporations, agencies and government-owned companies meant to remit operating surplus to the CRF as contained in the Fiscal Responsibility Act. Amendment Bill.
The Chairman of the House Committee on Finance, Hon. Abdulmumin Jibrin, and members of the committee were, however, not satisfied with the position of the NNPC.
The committee questioned the integrity of the report, observing that it was computed entirely by the corporation without any input from any professional and independent auditing firm.
The lawmakers said the report presented by the NNPC could only be tenable after it had been subjected to the scrutiny of an independent audit firm.
Information from This Day was used in this report.