PUNCH
The Nigerian National Petroleum Company Limited has confirmed that the Federal Government incurred a debt of N5.1tn in under-recovery and energy security expenses for fuel importation in 2023.
It also stated that a total sum of N9.38tn, described as receivables, was incurred on behalf of the Federal Government in 2023 for fuel imports.
In its financial statement for the fiscal year ending December 31, 2023, the national oil firm explained that N6.25tn was accrued under domestic crude oil supply and N3.14tn under other receivables.
Receivables, also regarded as accounts receivable, are debts owed to a firm by its customers for goods or services used or delivered but not yet paid for.\The amount (N9.38tn) was N7.2tn or 76.7 per cent more than the N2.18tn expenses incurred in the preceding year of 2022.
“Receivables from the Federation relate to expenses incurred on behalf of the Federation by the Group,” the report noted.
On the N5.1tn in under-recovery and energy security expenses, the firm stated that the cumulative amount spent was used as expenses from crude oil supply for domestic use and other receivables on behalf of the federation after it instructed the company not to sell its Premium Motor Spirit, popularly known as petrol, above a certain regulated price.
This total cost is made up of January to May 2023 under-recovery of N3.3tn and August-December 2023 energy security expense of N1.8tn.
The new term (under-recovery), as indicated in the financial statement of the NNPC for the fiscal year ending December 31, 2023, is a technical term to conceal a secret, a petroleum engineer and oil and gas analyst, Bala Zakka, stated on Tuesday.
“In my capacity as a practising petroleum engineer and a tax analyst, everything about the NNPC presentation looks vague,” Zakka told The PUNCH.
“This is because when you are talking to Nigerians, you need to be simple in language so that people can understand. It is only when you are talking to experts you use technical jargon. That term was used to confuse, convince and conceal a secret we all know and the company has not done any good service on this.”
Also, former Executive Secretary of the Nigeria Extractive Industries Transparency Initiative, Waiziri Adio, asked the NNPCL to be transparent in its dealings and stop using vocabulary to deceive Nigerians.
He said this while reacting to the national oil company’s response to reports that President Bola Tinubu had approved subsidy payment.
The Chief Financial Officer of the NNPCL, Umar Ajiya, had said the oil firm was only bearing what he called the “shortfall” and not a subsidy.
But reacting in a series of tweets on Tuesday, Waiziri Adio, who is the Executive Director of Agora Policy, a Nigerian think tank and non-profit organisation committed to finding practical solutions to urgent national challenges, wondered why the company was playing with words.
Adio stated, “NNPCL’s waffling on petrol subsidy is so disingenuous. Oh, it is not a subsidy, but a shortfall/PMS FX differential, same difference. No subsidy was paid to any marketer. Has anyone said NNPCL paid subsidy to marketers and is it even within their remit to pay subsidy to marketers?
“Former PPPRA was charged with approving subsidies for marketers and NNPC. The Ministry of Finance was paying marketers after verification of claims. The only difference with NNPC was that it deducted its subsidy and other claims from money for crude given to it for domestic use.
“It is not NNPCL’s responsibility, by practice or by law, to pay subsidies to marketers. That answer to a question not asked is at best a hollow attempt at deflection.”
He added, “Saying there is no subsidy because selling PMS below landing cost is a transaction between the company and the Federation (repaid or netted off) is a lame play with words that takes everyone for a moron. NNPCL can use this free advice: when in a hole, stop digging.”
Although President Bola Tinubu announced the removal of fuel subsidies during his inaugural address on May 29, 2023, there have been strong indications that the government still spends billions on subsidies. However, the federal government has consistently denied paying subsidies.
Former President Olusegun Obasanjo, in an interview with Financial Times…
