Governors Accuse NNPC of Failure to Remit Oil Royalties…

Dismisses corporation’s claim of 60m litres consumption of petrol daily as falsehood NEC orders closure of fuel stations close to borders

Governors under the aegis of the Nigeria Governors’ Forum (NGF) last night accused the Nigeria National Petroleum Corporation (NNPC) of failing to remit royalties as stipulated by the extant laws.

Making this accusation after a meeting of NGF with VicePresident Yemi Osinbajo in the State House, NGF chairman and Zamfara State Governor, Abdulaziz Yari, said whereas NNPC ought to remit 17-24 per cent of the value of each barrel of crude oil, it has always acted in violation of this provision.

According to him, NNPC is required by the Petroleum Act to pay royalties to Department of Petroleum Resources (DPR) and remit the remaining amount to the Federation Account.

Yari, who said the governors also dismissed claims of consumption of 60 million litres of petrol per day, insisted that the claim was untenable.

He lamented that despite efforts by the federal government to eradicate the subsidy regime, it has resurfaced again, adding that DPR had been ordered to shut down any petrol station that is 10km from the nation’s borders.

“This is the second time we are meeting with NNPC in respect of remittances into the federation account. And, governors and the federal government are not satisfied with the way remittances are being made because there are so many questions raised on Nigeria, most especially on the 425,000 barrel domestic and 180,000 barrel component of Nigeria from the joint venture partners.

“We met last week the NNPC and we came and briefed our chairman of the National Economic Council. We raised three issues - one, the issue of royalties. Each and every barrel taken out of the country there is either 17 or 24 per cent of it as royalty and there is 17 or 20 per cent as tax.

“So, our main concern is that the DPR, said the NNPC is not remitting any payment of royalty, what they do is that they transmit direct from the NNPC to the federation account which is not allowed by the law.

“According to the law that established the DPR, section 196 of the Act, said all the royalty should be paid to DPR and then transmit to the federation account, which is not.

“So, we discussed today and we have sorted those ones out. The NNPC will not transmit to federation account with clear distinction that this amount is for royalty and X amount is for taxes, and X amount is profit from the sales. So, we achieved that.

“At the same time, NNPC is making payment on behalf of Nigeria on cash-call contribution and also the NNPC is making payment of cash call arrears of Nigeria’s contribution. But, our main concern is that in 2015, they said about $16.8 billion which was outstanding was not paid by the last administration and they negotiated it down to $5.1 billion according to them.

“What we said specifically is that they should bring to us how much they have paid from 2015 to date and what is outstanding. And we directed them to stop payment until the claims are proven and then we can give further directives. That too was achieved.

“On the issue of cost recovery otherwise called subsidy, the issue of subsidy resurfaced again after the efforts of Mr. President. Before now, oil was $40 per barrel and now it is about $78 a barrel.

“So, they are depending largely on importation.

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