Missing $20bn Oil Money: FG to hire forensic auditors —Okonjo-Iweala

The Federal Government is to hire independent forensic auditors to examine the books of the  Nigerian National Petroleum Corporation, NNPC,  with a view to ascertaining whether or not it has failed to remit  oil revenues to the Federation Account, as alleged by the Governor of the Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi.The Minister of Finance, Dr. Ngozi Okonjo-Iweala disclosed this at a press briefing in Abuja, yesterday, after appearing before the Senate Committee on Finance which is investigating the alleged unremitted fund.At a public hearing in the Senate last week, the CBN Governor revealed that records available to the bank showed that the total amount generated from crude oil sales was $67.8 billion while records of remittance to the Federation Account by the NNPC was $47.8 billion with a shortfall of $20 billion not accounted for.Mallam Sanusi, who also appeared before the committee was, however, not convinced by the explanations put forward by both the NNPC and the Finance Minister and insisted that $20b was missing.At the committee hearing, yesterday, the Minister of Finance said going by the controversy that had surrounded the remittance of the subsidy fund, there was the need for external auditors to carry out a forensic auditing of NNPC account on the issue.She said the services of forensic experts were needed to verify data submitted by NNPC which the Petroleum Products Pricing and Regulatory Agency, PPPRA had certified to ascertain whether the claim was true or not as  the PPPRA and the ministry of finance alone cannot establish the veracity of the claim.She said: “Our judgment is that a proper examination of these documents requires technical expertise beyond the capacity of the reconciliation team and, therefore, we believe we should have an independent forensic audit, managed independently of these submissions.“We have decided to let the forensic auditors examine the accounts (of the NNPC) and let Nigerians fully know what is going on.“We understand that this kind of forensic audit requires experts who have some knowledge of the petroleum industry because it is very specialized.  What the NNPC submitted was a mountain of documents on shipping, loading, when ships arrived and all that. It requires specialized forensic auditors to work on it”.Dr. Okonjo-Iweala admitted that the nation’s oil account was complex but assured that there was a proper process for accountability.Her words:  “There is a proper process going in this country and all those writing should know that there is due process in this country.  Reconciliation has been going on in the last two years.“The oil account is a very complex business. For example, oil is lifted to pay back what is called “carry arrangement “ in which oil is supplied for loans taken by NNPC in the past and is to be paid back in crude oil to those creditors who gave NNPC those loans. So when you look at it, someone can say there is a missing x number of barrels which should have been accounted for.  But it is used in paying for debt owed by the NNPC.“That is why we are asking for forensic audit so that we can have all these things clearly verified. You can’t just look at the balance of payment numbers- you will not get it right.  Those are some of the reasons why we said it is a complex issue. Let us get the experts into this and let them give account to Nigerians”.She added that “the issue of unremitted funds by NNPC is not new and all attempt to make it look as if the work that should be done in this country to reconcile accounts by the Ministry of Finance is not true.“The finances of the country that come into the budget have been managed very transparently to the point that the budget of the country is so detailed that people can tell how much is spent in the State House to buy forks and knives and be able to criticize.“Even if they don’t like it, they have the information and we should be proud of that as a country. There is no country from my experience of over 60 countries that have the details released by the budget office of this country.“The issue is that where is that money, how is it being accounted for and we have led the process. We asked both the NNPC and the PPPRA to produce their documents and they had produced certified copies for the $10.8bn and we have asked for an independent audit.“A lot of accusations are being made in this country and the only way to be satisfied is to have an independent audit.”Subsidy withdrawal: Legal interpretation needed — Alison-MaduekeIn her submission, the Minister of Petroleum Resources said that there was nowhere in the government gazette where authority was given on the withdrawal of kerosene subsidy and that there was the need for legal interpretation.Alison-Madueke said: “For years, the issue of the Presidential directive given by late President Musa Yar’Adua had been brought up over and over again. At the time, an inter-ministerial meeting was held, both ministers of finance and that of petroleum at that time were parties to that meeting and at that time, a decision was taken to stay action on the memo because kerosene was very crucial to Nigerians.“Masses of Nigerians deal with it today. The landed cost is N150  but it was being subsidized at N150 because we cannot effectively move the products around the country because of the damage done to our facilities.“The reason for staying action is because if we remove the Subsidy on kerosene suddenly, obviously the price of kerosene will escalate. It will cause a major problem for the economy and the government. There will be untold hardship for the Nigerian masses.“The GMD at that time wrote two memos to the Finance Minister for clarification despite a presidential directive but no clarification came, hence the subsidy remained. The issue of deduction at source happened because the product landed at N150 and was sold at N50.“There is a N100 gap which must be covered and it is not budgeted for. The NNPC was unable to retrieve the amount. In this case, based on the first line charge in the Appropriation Act, it means that NNPC would have gone under long time ago under the weight of the Subsidy and it would have affected the economy of other countries in West Africa.“I do think the law court should decide on the legality or otherwise on the deduction of subsidy on kerosene.“The business of kerosene had become a very distracting and messy business in terms of all what is happening and what is being said in the polity. It will be very simple for the NNPC and the Ministry of petroleum to withdraw from the issue of kerosene but there is no marketer that wants to go into the business.“They will come in but it will take time before they take over the distribution but before then the price of kerosene will go up astronomically and we all know that. We have to establish a balance so that the masses of this country do not suffer.No amount of fund is missing — NNPC bossThe Group Managing-Director of  NNPC Andrew Yakubu in his own submission, said no amount of the subsidy fund was missing and explained that the CBN and the Federal Ministry of Finance were clearly aware of the outstanding amount and the issues relating to its non-realization.According to him, unpaid amount on petroleum products was $8.76 billion; crude oil and product losses was $0. 76 billion, $0.46 billion was for national strategic reserve holding, while pipeline maintenance and management  cost $0.91 billion. Read more on Vanguard

Follow Us on Twitter: Click here

Like us on Facebook: Click here

Add on BBM: 2860E881