NNPC Denies Subsidy Fund Deduction

The Nigerian National Petroleum Corporation (NNPC) on Wednesday denied deducting money in respect of subsidy from the federation account.

It would be recalled  that on January 17, the Chairman of  Nigerian Extractive Industries Transparency Initiative (NEITI), Professor Assiss Asobie, accused the NNPC of deducting money from the federation account.

Group Managing Director of the NNPC,  Mr. Austen Oniwon made this clarification at an investigative hearing organised by the House of Representatives ad-hoc committee on the management of fuel subsidy regime. He said that the Act establishing the corporation allowed it to deduct money before paying same into the federation account.

“We don’t take money from the federation account and we do not intend to take money from the federation account, “I only deduct what is authourised by the Petroleum Products Pricing Regulatory Agency (PPPRA),’’  he explained.

Oniwon noted that subsidy payment shot up due to the increase in price of crude oil in the international market and the worsening value of the Naira against the dollar adding that N1.5 trillion was expended on subsidy for more than six years.

He said that the total money paid to the corporation up to August 2011 stood at N673 billion while it supplied more than 46 billion litres of petrol during the period.

On the N46 billion duties owed the Nigeria Customs Service, Oniwon said that the corporation would reconcile with the service, just as the Turn Around Maintenance (TAM) of the Port Harcourt refinery would commence in October, while that of Warri and Kaduna would commence in 2013.

I said he: “Discussion is ongoing with the original builders of the three refineries while corporation would provide the fund for the project, saying that the money would not come from the federation account”.

Oniwon  said that if the rate of pipeline vandalism was not addressed, it would be difficult for the corporation to serve Nigerians with petroleum products, noting “Unless refineries are protected, we will continue to talk about subsidy.’’

Mr Reginald Stanley, the Executive Secretary of the PPPRA, said that the Agency was not involved in the payment of subsidy to marketers, but only monitored the supply of petroleum products to ensure that accurate volume was supplied.