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NNPCL Remitted Zero Allocation To Federation Account In 2022 Due To Subsidy Payment — CFO Umar Ajiya

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The Nigerian National Petroleum Company Limited (NNPCL) remitted literally zero funds to the Federation Account in 2022 due to the payment of subsidy on Premium Motor Spirit, popularly called petrol, the Chief Financial Officer, NNPCL, Umar Ajiya, has said.

NNPCL is a significant source of income for Nigeria. It serves as the national oil corporation, managing the nation’s gas and crude oil reserves and handling various other important duties.

In a 5.24-minute video that the oil major posted on Sunday, Ajiya claimed that the gasoline subsidy prevented the revenue-generating company from filing taxes and royalties to the Federation Account and also prevented it from turning a profit.

Also, NNPCL, in the documentary, said, “The lingering constraint of fuel subsidy payment hampered its (NNPCL) growth potential, until a new administration emerged, bringing an end to the subsidy regime and saving the company from bankruptcy and setting it on a path of financial prosperity.”

It stated that this enabled the oil firm to grow its profit from N674.1bn in 2021 to N2.54tn by the third quarter of 2022.

President Bola Tinubu declared during his inaugural speech on May 29, 2023, that “subsidy is gone!” The declaration by the President was immediately enforced by NNPCL the next day. NNPCL is Nigeria’s sole importer of PMS.

Reacting to this, Ajiya said, “That action of saying subsidy has gone, literally saved this nation N400bn on average every month. And what that meant was that the totality of the entitlements of tax, royalties and profits were all going into subsidy.

“And that was why we reached a position in 2022 where we literally remitted zero to the Federation Account. It was unpalatable, but we can’t give what we don’t have.

“We were taking NNPC’s cash flows from other operations to augment for products and it could not be sustained beyond June 2023.”

Fuel subsidy gulped over N3.3tn in 2022, as the Federal Government struggled to hold the cost of the product far below its global market price. The cost of the commodity jumped by over 250 percent immediately subsidy was removed by Tinubu.

Ajiya confirmed that the removal of subsidy had made the company start making remittances into the Federation Account.

“We have now begun to pay dividends to the federation. We are also paying our due obligations in terms of taxes and royalties,” he stated.

The company further stated in the documentary that the end to subsidy enabled it to contribute N4.5tn to the Federation Account in nine months.

“For the first time in a long time, NNPC Ltd in 2023 contributed to the Federation Account, accounting for N4.5tn between January and September 2023,” the national oil company stated.

Meanwhile, the Nigerian National Petroleum Company Limited spent an estimated NN2.9tn on wages, entertainment, bank charges, running cost and others between September 2021 and December 2022.

This was contained in the NNPCL’s recently released Audited Financial Statement for 2022.

In the report, the NNPCL Group gulped a total of N1.7tn as its general and administrative charges for the 16 months period, while the company spent a sum of N1.2tn.

According to the report, both NNPCL Group and the company spent a total of N872bn on “other expenses” not clearly specified in the document.

Security expenses by the Group and the company stood at N532bn, while entertainment expenses took N8.35bn.

In the period under review, a sum of N373bn was spent on employee benefit expenses, which include salaries, wages, allowances, pensions and gratuities.

Directors’ expenses gulped N1.2bn, office running costs consumed N1.8bn, while management and facilitation fees took N295m.

It was observed that N1.65bn was expended on donations; audit fees was N2bn as fines & penalties took N45bn.

Other expenses include bank charges, N675m; depreciation of other property, plants and equipment, N67.9bn; depreciation of right of use asset, N1.3bn; advertisement and publicity, N4.9bn; legal and professional fees, N8.3bn; printing and stationery, N57.5bn; rents and rates, N35bn; repairs and maintenance N219.9bn; travelling and transport, N354.2bn; minimum tax and levy, N15.65bn, write-off of property, plant and equipment, N139.8bn; postages and telephone, N3.46bn among others.

The report showed that the NNPCL Group generated a revenue of N8.82tn in 16 months and the company made a sum of N2.9tn from September 2021 to December 2022.

For the NNPCL Group, the profit before income is N1.81tn; income tax credit is N717bn. Profit for the period is N2.52tn, while total comprehensive income for the period is N4.7tn.

As for the NNPCL Company, the profit before income is N1.53tn; income tax credit is N459.7bn. Profit for the period is N1.992tn, while total comprehensive income for the period is N3.77tn.

The NNPCL Group generated N3.53tn revenue from crude oil sales; N.4.51tn from petroleum products sales; N683bn from sales of natural gas N683bn and N100.5bn from services N100.5bn.

“Revenue from crude oil sales is from sales of utilized crude during the period and liftings of equity interest in various oil assets.

“Petroleum products sales include the sale of Premium Motor Spirit, Dual Purpose Kerosene, Automotive Gasoline Oil, Naphtha, lubricants and other related products.

“Sale of natural gas represents the invoice value (transaction price) of natural gas sold to third parties. Revenue from services consists of revenue from seismic contracts, time8 based contracts, gas transmission tariffs, shipping, marine and engineering,” the report explained.

The report disclosed that the NNPCL account was audited by PricewaterhouseCoopers Chartered Accountants, SIAO Partners Chartered Accountants and Muhtari Dangana and Co. Chartered Accountants.

BIG STORY

National Assembly Passes Life Imprisonment Bill For Nigerian Drug Traffickers

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In a bid to tackle drug-related crimes, the National Assembly has amended the National Drug Law Enforcement Agency (NDLEA) Act, introducing life imprisonment for drug offenders and traffickers.

This comes after the Senate and House of Representatives adopted the harmonised report on the amendment.

Senator Tahir Monguno, Chairman of the Senate Conference Committee, presented the report, highlighting that the amendment introduces stricter penalties to deter drug-related crimes.

“Any person who unlawfully engages in the storage, custody, movement, carriage or concealment of dangerous drugs or controlled substances and, while doing so, is armed with an offensive weapon or disguised in any manner, commits an offence under this Act and is liable, upon conviction, to life imprisonment,” Monguno said.

The Senate approved the amendment through a voice vote during Thursday’s plenary, which was presided over by Deputy Senate President Barau Jibrin.

In addition, the Senate passed the Revenue Mobilisation, Allocation, and Fiscal Commission Bill, 2024, aimed at replacing the 2004 RMAFC Act. Yahaya Abdullahi, Chairman of the Senate Committee on National Planning and Economic Affairs, stressed the need for the commission’s reform, citing Nigeria’s declining revenue and increasing population.

“The Act, last revised over 20 years ago, no longer reflects Nigeria’s evolving economic realities. This bill proposes additional funding and a restructured operational framework for the commission to improve its efficiency,” Abdullahi explained.

He further emphasised the need for adequate funding from the Federation Account for the RMAFC to effectively carry out its constitutional duties.

The bill, passed after deliberations and a majority vote, now awaits President Bola Tinubu’s assent to become law.

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BIG STORY

UPDATE: We’re Ready To Provide Evidence For Trial Of Simon Ekpa — Enugu Government

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The Enugu State Government has expressed its readiness and willingness to provide evidence to assist in the prosecution of Simon Ekpa, who was arrested in Finland on Thursday over allegations of sponsoring terrorism in Nigeria.

Enugu State Government made this offer in a statement released by the Secretary to the State Government, Prof. Chidiebere Onyia, on Friday.

In the statement, the Enugu State Government also commended the Government of the Republic of Finland for the arrest of Ekpa, whom it described as “the Finland-based leader of the criminal gang, Autopilots.”

The Enugu State Government further referred to Simon Ekpa as “a common criminal, con man, and terrorist, who has no interest of Igbo people at heart.”

It added that Ekpa “is a murderer and fraudster, who delights in killing his people and living large off their misery.”

“Enugu State was ready and willing to provide evidence of Ekpa-sponsored atrocities against Ndigbo to aid his trial and conviction, whether in Finland or Nigeria.”

“The Enugu State Government welcomes the arrest of the Finland-based terrorist, Simon Ekpa.”

“His arrest and trial will no doubt go a long way in strengthening peace, security, and stability in all parts of the South East.”

“This arrest is in line with the demand of Governor Peter Mbah Administration, which has repeatedly made it known that Ekpa is a megalomaniac, common criminal, murderer, and fraudster, who takes joy in feeding fat on the manipulated emotions of Ndigbo and inflicting misery on the South East region.”

“Ekpa has for long, and unfortunately from Finland, made a living by creating a siege climate and mentality in the South East, destroying lives, property, and the Igbo trademark of entrepreneurship and hard work.”

“He thrives on manipulating, exploiting, and extorting the people on the pretext of fighting for their interest and for the restoration of Biafra,” the government said.

Ekpa was arrested and detained alongside four other suspects by the government of Finland on charges of sponsoring terrorism in Nigeria, according to local newspapers in the European country.

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BIG STORY

Much Ado About Meddlesome Minions, And Messengers Of Misinformation — By Tayo Williams

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There is a growing phalanx of pseudo-intellectuals parading the social media space with faux and fictitious knowledge of the indigenous oil and gas industry, and it is scary because of the grave danger they portend and present for the average Nigerian.

From X (formerly known as Twitter) to Facebook and even the photos and videos-sharing site, Instagram, they abound, in their inglorious number, lending their platforms to deliberately distort facts and spread misinformation especially to favour the narratives propounded by popular Nigerian businessman Aliko Dangote, owner of the Dangote Petroleum Refinery.

Since the refinery began operations earlier in the year, it has been one week, one controversy allegedly orchestrated by Dangote in a brazen attempt to arm-twist the Nigerian National Petroleum Corporation Limited, NNPCL, into playing by his rules.

Those conversant with the modus operandi of Dangote and his refinery say the long-drawn warfare with every institution and individual in the oil and gas value chain is nothing but a self-seeking and mindless profit maximisation tactic.

Whilst nobody begrudges Dangote’s drive for profit as a businessman, perhaps he needs to be reminded that the NNPC has a mandate to ensure and provide energy security in a way that is affordable and sustainable for the generality of Nigerians. And, the NNPCL management has declared in very unambiguous terms that it would not pander to the din of the market whether orchestrated by Dangote, his rampaging minions or anyone else.

The truth, however, is that there is an increasing army of vacuous, vicious, and vile individuals strutting the social media space defending and propagating outright and outlandish falsehoods. Of particular concern is one Kelvin Emmanuel who has become the unofficial mouthpiece of the Dangote Refinery. Going from one media house to the other, he pulls figures out of the air and projects obnoxious untruths on hapless Nigerians. With the backing of his paymaster’s billions, it is no surprise that this otherwise irrelevant and fatuous character now commands appearances on major television stations.

But it is on X that he has made lying glibly and gratuitously the Holy Grail. He once premised Dangote’s inability to secure feedstock for his refinery on the government and the NNPCL. While peddling this untruth, he conveniently forgets that the refinery had a seven-year window, during its construction phase, to lock in feedstock supplies that could last a minimum of five years. Dangote did none of that. As it would later unfold, his game plan, which Emmanuel glossed over, was to monopolise equity oil and production quotas to serve his business interests.

Another deliberate misinformation from the Dangote camp was the allegation that International Oil Companies (IOCs) and other industry players were trying to sabotage his interests. Apart from being an investor in the Dangote Refinery, the NNPC still supplies gas to various Dangote companies across Nigeria. How can anyone or any institution jeopardise their investment? What further proof of faith does Dangote and his minions need to know that the NNPC is their cheerleader, and is here to make operating in the industry seamless and a win-win for all?

Echoing Dangote’s baseless stance, Emmanuel also called for the sack of Mr. Farouk Ahmed, Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), regulators of Nigeria’s midstream and downstream value chain. By Emmanuel’s warped reckoning, Ahmed had no locus to speak against Dangote or his enterprise because the latter questioned the quality of the product from Dangote Refinery and other local refineries in comparison with imported ones. Of course, Emmanuel’s was a lone voice in the wilderness because those who understand the invaluable role that the NMDPRA plays in the industry did not as much as dignify his tirade with a glance.

In a robust response to Emmanuel’s groundswell of egregious lies, Ibrahim Y. Kabo, a petroleum engineer based in Abuja, described him as “Someone who has not seen the inside of a refinery before Dangote built one, let alone understood the mechanism of the energy industry, …(yet) assuming the role of an authority in oil and gas matters.”

He went further to lampoon Emmanuel for stating that only Dangote Refinery’s products meet specifications while others are all sub-standard. “The obvious question is: whose specifications? For a refinery that has barely made four of seven pre-inauguration certifications, it sounds somehow laughable to suddenly assume the role of regulator in an industry you’ve barely entered,” Kabo said.

In the article, entitled, “The Hand of Aliko, the Voice of Kelvin: Inside Dangote Refinery’s Media Stunt Lab”, Kabo declared that from all Emmanuel’s interviews and pretensions to be an industry expert, one thing is obvious: “He lacks an understanding of both the mandate and the reach of NNPC as a national oil company.”

Kabo adds that, “Downstream is the least of NNPC’s business interests. The mandate, as per PIA (Petroleum Industry Act), is to facilitate both the extraction and commercialization of Nigeria’s oil and gas resources. 20 billion dollars may be a lot, but NNPC and industry regulators routinely handle projects of that magnitude. At best, Dangote and (Emmanuel’s) ranting are an irritation. I believe that’s why NNPC openly declared it was not interested in being Dangote’s off-taker.”

Like the Yoruba saying goes, derision does not stop the sweetness of the honey. The meddlesome minions and messengers of misinformation can continue dancing naked in the marketplace, but what is most important is that the NNPCL has assured that it will not cease doing everything in its capacity “to harness the possibilities of oil and gas, address energy demand and drive the national economy, and become the number one oil producer and supplier in Africa.”

 

Tayo Williams is a Lagos-based media executive

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