From Kunle Aderinokun in Abuja, 07.26.2010 

 

The Senate Committee on Petroleum Upstream said at the weekend that the Nigerian National Petroleum Corporation (NNPC) failed to meet the deadline for submission of its annual budgets from 1999 to date and the law authorizing it to make releases of funds totalling N1.5 trillion from its coffers over the years. 

 

Chairman, Senate Committee on Petroleum Upstream, Senator Lee Maeba, who confirmed this to THISDAY yesterday in Abuja, said the matter would be handled at the next legislative day, which is Tuesday. But in a swift reaction, NNPC’s Group General Manager, Group Public Affairs, Dr. Levi Ajuonuma, told THISDAY over the telephone that the corporation and the Senate Committee were working together to resolve the issue, pointing out that the former had been complying with all the requests from the  latter. 

 

“We are working together with the Senate Committee. We are complying with everything they asked us to do. There is no problem. The Senate Committee has already said NNPC is not insolvent,” he said. The committee had on Wednesday at an investigative public hearing organised by Senate Joint Committees on Petroleum Upstream and Downstream,  given NNPC a 24-hour deadline to submit its annual budgets since 1999 and the law authorizing it to make the aforementioned releases.

 

The members of the committee, who had  observed that NNPC Board of Directors was responsible for the approval of NNPC budget without recourse to the National Assembly, directed the NNPC boss to produce copies of the law authorising such approval within 24 hours. NNPC Group Managing Director, Mr. Austin Oniwon had in a letter sent to the Federation Account Allocation  Committee (FAAC) confirmed that NNPC is indeed insolvent.

 

Oniwon had claimed  that  some of the country’s past leaders unilaterally approved the withdrawal of N1.5 trillion from the coffers of the corporation for various uses without due process.He had specifically pointed out that one of the past presidents unilaterally directed NNPC to release $18 million for the establishment of a Sugar Company without recourse to the National Assembly as provided for by the extant laws and that the money has not been paid to the corporation.

 

The NNPC boss  had also added that the Corporation was also directed to release additional sum of N651 million for the take-off of the Department of Petroleum Resources (DPR) but that the money was not refunded.Oniwon who was in company with the Minister of State for Finance,  Mr. Remi Babalola, at the investigative hearing, had explained that the Corporation was unable to pay the N450 billion to Federation Account because of its unimpressive cash flow.The NNPC, boss who had maintained that corporation was in a position to pay the debt, however noted that it decided not to pay the sum as a result of the N1.5 trillion indebtedness.

 

Oniwon, in the letter addressed to Babalola, had  noted that “NNPC is facing financial difficulties evidenced by amongst others, the inability to pay for domestic crude as at when due and delays in settling bills for fuel imports; the financial difficulties essentially stem from disequilibrium between costs and cash inflow streams; that the corporation is owed substantial amounts as un-reimbursed subsidy on petroleum products.

 

“NNPC is insolvent as current liabilities exceeded current assets by N754 billion as of December 2008 and so; NNPC is incapable of repaying the N450 billion owed to the Federation Account unless it is reimbursed the N1.156 trillion from the Ministry of Finance.”

 

Source:ThisDay