…As Reps panel, Fashola disagree over $1.5bn loan, German consultant***
The Nigerian National Petroleum Corporation (NNPC) on Monday injected a fresh twist to the fuel subsidy controversy with a claim that the Federation Account was indebted to the corporation about N170.6 billion in unpaid arrears.
The Chief Financial Officer of the corporation, Isiaka AbdulRazaq, told the Senate Committee investigating fuel subsidy payments that the amount covered the period between January 2006 and December, 2015.
The Group Managing Director of the Corporation, Maikanti Baru, triggered the controversy in the wake of the fuel scarcity that resurfaced in the country late last year.
Mr. Baru had said the NNPC was again paying subsidy on the supply and distribution of petroleum products, despite a federal government decision in 2015 to remove the payment from the fuel pricing template by the Petroleum Products Pricing Regulatory Agency, PPPRA,
He said with landing cost of imported petrol at N171.40 per litre and the retail price fixed at N145 per litre, the NNPC was bearing as extra cost a minimum of N26.40 for every litre of petrol supplied.
However, the NNPC refused to accept the N26.40 difference as subsidy. Rather it preferred to count it as part of its operational costs deductible from the revenue transferable to the Federation Account.
But the Senate had demanded an explanation from the NNPC management on how the extra cost was funded for months without appropriation by the National Assembly as required by the Constitution.
On Monday, Mr. Baru led the NNPC management before the ongoing investigative hearing to explain the components of the alleged N5 trillion subsidy payments from 2006 to 2016.
In his presentation, the GMD said the figure was arrived at after deduction of N4.95 trillion received as payments from the N5.12 trillion approved as subsidy claims for the corporation from January 2006 to December 2015.
Mr. AbdulRazaq traced the subsidy regime to October, 2003 when NNPC was directed by government to commence the purchase of domestic crude oil at international market price without a corresponding liberalisation of the regulated price of petroleum products.
Mr. AbdulRazaq explained that under the subsidy regime, NNPC and other suppliers of refined petroleum products were entitled to file claims for subsidy to the PPPRA.
Unlike other oil marketers, he said NNPC had not been receiving cash payments for subsidy claims since its claims were deducted as operational cost payment to the Federation Account after due certification by PPPRA.
”In summary, NNPC submits that the amount of over N5.1 trillion was duly approved by PPPRA as subsidy claims for NNPC. Out of this sum, NNPC is still being owed N170.6 Billion,’’ the NNPC CFO said.
The NNPC asked the Senate Downstream Committee to assist in ensuring that the outstanding debt was settled to enable it effectively achieve its mandate as “the supplier of last resort to the downstream sector.”
The chairman of the committee, Kabiru Marafa, said the National Assembly will continue to support all players in the oil industry to ensure uninterrupted supply and distribution of petroleum products.
In the meantime, House of Representatives committee on power yesterday disagreed with the minister of Power, Works and Housing, Babatunde Fashola over the $1.5 billion loan it obtained for electricity distribution in the country.The loan was obtained on behalf of the Transmission Company of Nigeria (TCN).
This was revealed at an investigative hearing by the committee on power on the interim management of the TCN over a $1.5 billion World Bank loan facility and its adherence to the Fiscal Responsibility and Public Procurement Acts.Disagreement also ensued over delay in the execution of the National Electricity and Gas Improvement Project (NEGIP).
But Fashola said his productive time was being wasted due to duplicitous nature of the probes over the activities of his ministry. He urged the House leadership to streamline the number of hearings involving his ministry so that he could concentrate on the task of achieving results. His words: ”We have a letter dated December 20, 2017 and that letter is issued under the name of one Nnamdi D. Onuigwe Esq, Committee Clerk.
“The letter from the House stated that it had constituted an ad-hoc committee to investigate the Fiscal Responsibility and Procurement Acts by the TCN. It was pursuant to House resolution 114/ADHOT/TCN2 of the 20 December.
”Now, we were waiting to be invited by the ad hoc committee when we got this letter asking us to come today, signed by Committee Clerk, Ibrahim Sidi, pursuant to House resolution 189 of 5th December 2017.”
Fashola also faulted the committee decision to hire a German consultant, Ron Van Arnault, who he accused of working for Manitoba, a company that he said, caused the problems faced by TCN leading to the probe.He argued that the consultant apart from having worked for Manitoba, also benefited from contracts awarded without procurement approval in the ministry, and would not be totally professional in providing advice to the committee.
He explained that the procurement of TCN facilities were contracted out even before the assumption of the President Muhammadu Buhari administration, adding the major preoccupation of the ministry was to execute the projects and ensure the distribution of 7,135 megawatts generated across the country.
But Chairman of the Committee, Daniel Asuquo insisted that Fashola lacked the powers to determine who the committee engages as consultant.Asuquo alleged that he had text messages exchanged between Fashola and the consultant where the minister solicited his professional advice. He said: “Just as you have your reasons for taking decisions, I also have my reasons for hiring Ron and it’s not up to you to question our decision”Speaker of the House, Yakubu Dogara restated the commitment of the legislature to tackling challenges in the power sector.
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