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