NNPC’s $1.05bn withdrawal from NLNG backed by law – CFO
The Nigerian National Petroleum Corporation, on Thursday, reiterated that there was nothing illegitimate about the withdrawal of $1.05bn from the Nigerian LNG dividends account.
The corporation said the money was withdrawn in public interest in that it was used to support the importation of Premium Motor Spirit, popularly known as petrol, which is highly subsidised at the rate of N145 per litre.
According to data, petrol is supposed to be sold at a rate of at least N220 per litre but it currently sells at N145.
The Chief Financial Officer, NNPC, Mr Isiaka Abdulrazaq, said this was because the Federal Government, through the NNPC, tried to make the fuel affordable and available to Nigerians by paying the under-recoveries.
It said Section 7 of the NNPC Act empowered it to make the withdrawals from the NLNG dividend account.
Recall that the Senate had in November begun an investigation into the alleged diversion of $1.05bn from the NLNG dividends account by the NNPC.
However, the NNPC CFO, Abdulrazaq, said no money was diverted, explaining that the corporation met with the Senate Committee on Gas recently and provided the information requested by the committee.
According to him, the mandate given to the committee has nothing to do with misappropriation or missing money of any type.
He said, “It is about whether the use of those funds was legal or not. The committee is not saying the deductions from the NLNG dividends account were not legal or appropriated. They don’t have any issue with what the funds were used for or whether there is an issue around what the funds were used for.
“The Senate committee is basically investigating the legality of what we consider a legitimate withdrawal from the NLNG dividends account.”
Abdulrazaq described the NNPC as the shareholder of record in the NLNG, representing the interest of Nigeria.
He said, “The issue around the legality is about why and how did NNPC use those funds. There are two reasons. The first one is the 2018 Appropriation Act. The figure in the 2018 Appropriation Act as revenue from NNPC for oil and gas is net of costs. The same National Assembly appropriated the fact that the revenue will be net of costs.
“The second point is the NNPC Act, Section 7, Subsection 4(b), which says, ‘NNPC is allowed to maintain such monies as may be received by the corporation in the course of its operations or in relations to the exercise by the corporation of any of its functions under this Act and from such funds may defray all expenses incurred by the corporation.’”
Corroborating the NNPC CFO, Eniola Ogundele, an oil and gas lawyer, argued that the NNPC, as a shareholder in the NLNG, had the right to spend such money.
“The NNPC Act makes the corporation an entity that can enter into agreement, signs and execute contracts. Section 7 of the Act clearly confers such powers in NNPC without any ambiguity,” he added.
The Chairman of the Senate Committee on Gas, Senator Bassey Albert, had said the investigation of the application of $1.05bn NLNG dividend to support the importation of petroleum products into the country had nothing to do with any missing funds since no such money was missing in the first place.
Senator Albert, who doubles as the Chairman of the Senate Committee on the Application of the NLNG Dividend, explained that the clarification became necessary due to sensational and misleading reports in some sections of the media.