Al­leged $3.5bn di­ver­sion is $1.05bn loan to fund sub­sidy

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The Nige­rian Na­tional Petroleum Cor­po­ra­tion on Satur­day said the $1.05bn re­volv­ing loan ob­tained from the div­i­dend of the Nige­rian Liq­ue­fied Nat­u­ral Gas com­pany pre­vented petroleum prod­ucts’ chaos in Nige­ria.

It said the loan was used to sub­sidise the cost of Pre­mium Mo­tor Spirit, pop­u­larly known as petrol, in 2018, adding that it was un­for­tu­nate for the Na­tional Assem­bly to com­mence a probe into the use of the NLNG div­i­dend.

The Se­nate, on Tues­day, com­menced an in­ves­ti­ga­tion of the al­leged di­ver­sion of $1.05bn from the Nige­rian Liq­ue­fied Nat­u­ral Gas div­i­dend ac­count by the NNPC.

The probe was a sep­a­rate one from an ear­lier in­ves­ti­ga­tion by the Se­nate into il­le­gal pay­ments by the NNPC to aug­ment the short­falls be­tween the land­ing cost and pump price of petrol.

The Se­nate had set up an ad hoc com­mit­tee, chaired by the Ma­jor­ity Leader, Se­na­tor Ahmad Lawan, to in­ves­ti­gate an al­leged $3.5bn ac­count kept by the NNPC for petrol sub­sidy pay­ment.

Com­ment­ing on the de­vel­op­ment on Satur­day in Abuja, the NNPC’S Group Gen­eral Man­ager, Group Pub­lic Af­fairs Divi­sion, Ndu Ughamadu, told that the probe by the Se­nate was wrong as the $1.05bn loan saved Nige­ria from chaos.

He said, “The Se­nate got it wrong. Based on news­pa­per re­ports, the Se­nate said it was $3.5bn sub­sidy fund, whereas we do not have any­thing like sub­sidy fund. What we have is that we sourced for re­volv­ing loan based on the Nige­ria LNG div­i­dend to NNPC.

“And this is be­cause NNPC is a ma­jor share­holder in NLNG and in­ter-party agen­cies are man­ag­ing this and the fig­ure is $1.05bn. There is noth­ing like $3.5bn be­cause any­thing sub­sidy must be ap­pro­pri­ated by the Na­tional Assem­bly.”

Ughamadu added, “Now, it is im­por­tant to state that if we didn’t source for that re­volv­ing loan, the na­tion would have been in chaos. They are not look­ing at that but claim we spent $3.5bn when there is noth­ing like that. You can’t place some­thing on noth­ing.

“If we wanted to play safe, we would just ap­pear be­fore the Se­nate and when they say what of the $3.5bn, we will say noth­ing like that and that will be all. But for the sake of re­spon­si­bil­ity, we went fur­ther to clar­ify is­sues and told them what we have.”

When probed fur­ther to ex­plain why there would have been cri­sis across the coun­try if the cor­po­ra­tion had not sourced the $1.05bn loan, Ughamadu replied, “The na­tion would have been in chaos.

“Where would you source the money to im­port petroleum prod­ucts since you are now the sole im­porter? What ob­tained to­wards the last quar­ter of 2017 would have been the sit­u­a­tion now.”

Asked to state the du­ra­tion for which the loan was used in sub­si­dis­ing petroleum prod­ucts, the cor­po­ra­tion’s GGM stated that it was for one year.

Ughamadu said, “It is for a year. It is for 2018. That is an­other rea­son why we are not go­ing to see queues dur­ing the Yule­tide and beyond be­cause we are aug­ment­ing what is im­ported with our lo­cal pro­duc­tion. So, Nige­ria will not ex­pe­ri­ence fuel short­age this fes­tive pe­riod.”

The cor­po­ra­tion’s spokesper­son said it was un­for­tu­nate for the Se­nate to set up an in­ves­tiga­tive panel on the NLNG div­i­dend as the NNPC con­trolled the largest stake in the gas com­pany.

He said, “So, the in­ves­tiga­tive panel, set up by the Se­nate on the Nige­ria LNG div­i­dend, is un­for­tu­nate be­cause NNPC is the ma­jor share­holder and we utilise the div­i­dend paid to the NNPC for im­por­ta­tion of prod­ucts and it is a re­volv­ing loan.

“Mean­ing – the NNPC is go­ing to pay it back and if we didn’t ob­tain that and if the Na­tional Assem­bly has a lee­way, it should rec­om­mend to the NNPC on what should be done be­cause the price of petrol at N145 per litre is fixed.”

He added, “Ma­jor and in­de­pen­dent mar­keters are not im­port­ing and you ex­pect the NNPC to con­cen­trate on the im­por­ta­tion of prod­ucts, which is not our core busi­ness! And if that is not done, the en­tire na­tion will be in chaos; you and I will be af­fected, in­clud­ing mem­bers of the Na­tional Assem­bly.

“It was the same Na­tional Assem­bly that said NNPC should do ev­ery­thing within its reach to en­sure that the last fuel chal­lenge is wiped out and that is ex­actly what we have done.”

When asked to state the ac­tual amount which the cor­po­ra­tion cur­rently in­curs as ‘un­der­recov­ery’ on petrol, Ughamadu said he could not pro­vide the fig­ure off hand.

“The point is that I don’t have the fig­ures here, but you know it varies de­pend­ing on the in­ter­na­tional price of prod­ucts. Ex­cept I source the fig­ures from the PPMC (Pipe­lines Prod­uct Mar­ket­ing Com­pany) and I’m not in the of­fice right now,” he said.

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