CRUDE oil subsidiary the Nigerian National Petroleum Corporation (NNPC) has been accused by the Nigeria Extractive Industries Transparency Initiative (Neiti) of under-remitting N77.92bn ($216.63m) into the federation account during the course of 2017.
With Nigeria’s economy almost wholly dependent on the proceeds of crude oil which accounts for over 90% of government revenue, the NNPC is the country’s cash cow. Crude oil is exported by the NNPC and the proceeds remitted into the federation account with the Central Bank of Nigeria (CBN).
In its latest report into the activities of the NNPC, Neiti revealed that the NNPC deducted N297bn from earnings from the domestic crude allocation as costs and losses. This was broken down into N141.6bn for under-recovery of petroleum products, N25bn for crude and product losses and N130.4bn for pipeline repairs and maintenance.
“The sum of N77.92bn was under-remitted by NNPC to the federation account from domestic crude allocation in 2017. NNPC acknowledges the under-remittance and states that there is an ongoing reconciliation to net off the N77.92bn from the ‘established federation indebtedness to the corporation of N797bn arising from KPMG’s forensic audit of the corporation at the instance of the federation,” the report added.
Neiti also noted that the total revenue from the sale of oil and gas for 2017 was $14.5bn, with $13.18bn or 90.8% from crude oil and $1.32bn or 9.1% from gas. According to Neiti, the total crude oil production for 2017 was 692m barrels, of which 240.0m barrels or 35% was consumed internally, with exports going to 29 locations.
Domestic consumption was 4% higher than the 231.6m barrels used 2016 but was 19% lower than the 297.8m barrels consumed in 2015. According to the report, while there was a slight improvement on the figure for 2016, crude production for 2017 was about a fifth less than 2015 levels.