NNPC under fire over Nigeria’s oil money
The Chairman, Commissioners for Finance Forum, Mr. Mahmoud Yunusa, told newsmen at the weekend, that plans were underway to strip the NNPC of the power of collecting oil royalty and transfer same to the Department of Petroleum Resources (DPR) while the Federal Inland Revenue Service (FIRS) handles Petroleum Profit Tax (PPT) as was the practice in the past.
Yunusa also alleged that the amount, which the FIRS paid into the Federation Account in May, showed a decline of about N90 billion, adding that the committee would probe the underpayment.
He said: “Part of the process of strengthening the system will be to take the collection and remittance of royalty from NNPC to the Department of Petroleum Resources (DPR) while the collection and remittance of PPT will also be returned to the FIRS in line with the law.
This is part of the process that we are trying to strengthen and adopt. It is there, it is part of the law under oil and gas, like in any other IOC (International Oil Company), that all royalties should be collected and remitted to the Federation Account by the DPR. It is DPR’s responsibility. Before DPR collects that, it has to make sure that the actual amount that is supposed to be remitted is remitted.
“If it is under-remitted, the DPR will be responsible for the shortfall, and I know DPR would not want to be responsible for a shortage that they are not even aware of.
“If you are supposed to remit X billion naira, and you remit B billion naira to them, they won’t accept because it is under-remitted. The royalty is calculated and paid based on the oil lifted, the same thing with PPT.
“The NNPC has to remit the same amount that has to be remitted to FIRS, if not, the FIRS will not accept because they would not want to be responsible for the shortfall or under-remittance that ordinarily they shouldn’t be responsible. So that will balance the revenue collecting system.
“There should be a kind of checks and balances. Had it been we had this, this issue wouldn’t have cropped up. That is the system we are trying to strengthen and adopt”.
On whether royalty and PPT are the only two issues the federation account was looking at addressing, Yunusa replied: “If you are running a company and then you see that you are having a kind of bumps, potholes on the way and a lot of things are not very clear to you, you could expand the horizon of your checks. But for now, we want these two to be addressed and respected.
“If the NNPC remits its royalty and remits its PPT, it can’t come to FAAC and say we are contributing zero amount to the federation. If they say they are contributing zero and may be they get away with it that month, the following month would it come and say it is contributing zero?
“Their conscience will not allow them. Let’s even assume they have the guts to do it the second month, how long will it continue?
“But don’t forget both the first and second month, we are getting our royalty and PPT intact, but what is its own worth of doing business? What value has that added to the Federation Account and what value have they added to Nigeria?” Yunusa queried.