Federation owes NNPC N170.6 billion outstanding subsidy payments

Federation owes NNPC N170.6 billion outstanding subsidy payments

- Top management staff of the NNPC were at the pubic hearing of the Nigerian Senate on Monday, January 29

- The public hearing was hosted by the Senate committee on petroleum over subsidy payment by the NNPC

- The NNPC team, however, revealed that they are being owed by the federation for outstanding subsidy payments

The Nigerian National Petroleum Corporation (NNPC) on Monday, January 29, in Abuja revealed that the Nigerian federation was indebted to the corporation to the tune of N170.6 billion outstanding subsidy payments due from January 2006 to December, 2015.

Leading a team of top management of the NNPC to the ongoing investigative hearing on N5 trillion subsidy payments from 2006 to 2016, the group managing director of the corporation, Maikanti Baru, said the figure was arrived at after deduction of N4.950.80 trillion received as payments from the N5.121.40 trillion approved subsidy claims of the corporation from January 2006 to December 2015.

Providing details of the accruals, chief financial officer of the corporation, Isiaka AbdulRazaq, traced the advent of 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 liberalization of the regulated price of petroleum products.

He explained that under the subsidy regime, NNPC and other suppliers of refined petroleum products were entitled to file subsidy claims to the Petroleum Products Pricing Regulatory Agency (PPPRA).

Federation owes NNPC N170.6 billion outstanding subsidy payments
NNPC GMD, Dr Maikanti Baru exchanging pleasantries with the Senate majority leader, Ahmad Lawan, during the public hearing. Photo credit: NNPC

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AbdulRasaq, however, noted that unlike other oil marketers, NNPC did not receive cash payment for subsidy claims as its subsidy claims were deducted out of 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 corporation called on the Senate downstream committee to assist in ensuring that the outstanding debt was settled to enable NNPC effectively achieve its obligation as the supplier of last resort to the downstream sector.

Chairman of the Senate committee, Senator Kabiru Marafa, commended the NNPC for the elaborate presentation while pledging its support to all stakeholders in the sector to ensure uninterrupted supply and distribution of petroleum products.

READ ALSO: Baru raises alarm on activities of cross-border petrol smuggling syndicates

Meanwhile, the Nigerian Petroleum Development Company (NPDC), one of the upstream subsidiaries of the NNPC, has revealed its plan to increase its daily crude oil production to 500,000 barrels per day before 2022.

The target was announced by the NNPC GMD, Baru, during the inauguration of the board of directors of the company in Abuja. Baru who also doubles as chairman of the board, while addressing the members charged them to grow the company’s assets and ensure that the 500,000 barrels per day crude oil production target is met by 2022.

He disclosed that the company was currently supplying 50 per cent of the West African Gas Pipeline system gas, adding that it was the in thing to have more gas assets, while commending the company for leaving up to expectations.

Former NNPC group managing director Andrew Yakubu in court over fraud allegations on Legit.ng TV

Source: Legit.ng

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