THE Governors Wednesday night expressed displeasure over the handling of affairs at the Nigerian National Petroleum Corporation, NNPC, alleging fraudulent practices.
The governors also directed the NNPC to stop payment of any form of royalty to the Federation Account and ordered that every payment should be paid to the Department of Petroleum Resources, DPR as stipulated by law.
The governors who met behind closed-doors with the Vice President, Yemi Osinbajo who is also Chairman of the National Economic Committee, NEC, at the State House further directed that filing stations that are 10 kilometers close to borders should be closed down, while also there should be tracking devices to monitor the movement of tankers to reduce smuggling the petroleum products out of the country.
Briefing state House correspondents after the meeting, Chairman of Nigeria’s Governors Forum and governor of Zamfara State, Abdulaziz Yari, noted with dismay the reintroduction of subsidy which the NNPC calls vost recovery.
Yari said, “This is the second time we are meeting with NNPC in respect of remittances into the federation account.
And, governors and the federal government are not satisfied with the way remittances are being made because there are so many questions raised on Nigeria, more especially on the 425,000 barrel domestic and 180,000 barrel component of Nigeria from the Joint Venture Partners.
“We met last week, the NNPC and the NGF came and briefed our chairman of the National Economic Council.
We raised three issues, one, the issue of royalties. Each and every barrel taken out of the country there is either 17 or 24 percent of it as royalty and there is 17 or 20 percent as tax.
“So, our main concern is that the Department of Petroleum Resources (DPR), said that the NNPC is not remitting anything, payment of royalty, what they do is that they transmit direct from the NNPC to the federation account which is not allowed by the law.
“According to the law that established the DPR, section 196 of the Act, said all the royalty should be paid to DPR and then transmit to the federation account, which is not. “So, we discussed today and we have sorted out those ones.
The NNPC will not transmit to federation account with clear distinction that this amount is for royalty and X amount is for taxes, and X amount is profits from the sales.
So we achieved that. “At the same time, NNPC is making payment on behalf of Nigeria on Cash-Call contribution and also the NNPC is making payment of cash call arrears of Nigeria’s contribution.
“But, our main concern is that in 2015, they said about $16.8 billion which is outstanding was not paid by the last administration and they negotiated it down to $5.1 billion according to them. “What we said specifically is that they should bring to us how much they have paid from 2015 to date and what is outstanding.
And we directed them to stop payment until the claims are proven and then we can give further directives. That too was achieved.
“On the issue of cost recovery otherwise called subsidy, the issue of subsidy resurfaced after the efforts of Mr. President. Before now the oil was $40 per barrel and now it is about $78 a barrel, so they are depending largely on importation.
‘Therefore, the cost is higher than what they are selling at the filling station and they need more money. When there was no cost recovery, the NNPC clearly gave us the number of 33 and 35 million liters per day as the consumption of Nigeria.
But now that with the new regime of cost recovery, NNPC is claiming daily consumption of 60 and 65 million liters per day? Which we rejected and said no. “So many of our international partners are saying that even if we are feeding Nigeria, Cameroon, Ghana and Niger, we cannot consume more than 35 million liters per day.
“So we are wondering where the 60 million liters is coming from. So, we are trying to sort that one out, that one is not yet resolved. “But, we are now taking a very hard decision, that because NNPC said the reason why they were lifting 60 million per day is because our borders are porous, so we have taken the decision that any filling station that is 10 kilometers on the border side should be closed by DPR.
And, then we will do recertification according to the needs. “Secondly, we have directed the minister of Finance in collaboration with the DPR and the NNPC to put tracking devices on every truck in other to monitor where they are discharging the fuel.
“Because, we are suspicious of the number, we cannot confirm the difference from 30 million liters per day consumption to 60 and 65 million liter per day consumption. So these are our decisions on the NNPC.”