The new revenue template for revenue-generating agencies of government that came into existence last November may have exposed the alleged tardiness in accountability at the Nigerian National Petroleum Corporation (NNPC).
The Federation Accounts Allocation Committee (FAAC) document revealed that the development was largely responsible for the past squabbles between the agency and the states, who had always accused it of under-remitting to the Federation Account for onward distribution to the threes tiers of government.
An NNPC report for December 2018 that formed the basis of the January 2019 FAAC meeting indicated that the national oil agency generated N281.745 billion from crude oil sale during the period, yet remitted a paltry N42.839 billion to the Federation Account while the balance was explained away for one payment or the other, including expenditure on government’s priority projects.
The FAAC, comprising representatives of the federal and state governments had over the years accused NNPC of lacking transparency in its revenue presentations, necessitating the new mechanism.
A breakdown reveals that oil and gas export fetched N105.779 billion while N175.966 billion was gotten from sales of domestic oil and gas.
According to the document, the corporation paid N110.087 billion to its joint venture (JV) partners as recovery cost another N50.831 billion as subsidy.
The NNPC also reported that it withheld N2.462 billion as strategic holding cost and held back N1.724 billion for same purpose the preceding month when its income was 22.5 per cent higher.
Other deductions included pipeline management cost (N3.666 billion) and pipeline operations repair and maintenance (N8.044 billion), amounting to N13.874 billion.
It equally held back N5.067 billion to “augment crude oil and product losses”, bringing the total to N174.793 billion.
In the report, the corporation also spent N16.844 billion on “government priority projects”, paid N20.678 million to the Department of Petroleum Resources (DPR) as royalty and N26.599 million to the Federal Inland Revenue Service (FIRS) as taxes.
In March 2018, the NNPC Group Managing Director, Dr. Maikanti Baru, disclosed that the corporation had pruned the cost of producing a barrel of crude oil to $20 and was working on further reducing it to $15 per barrel.
Globally, the cost of producing an additional barrel of oil is lowest in Saudi Arabia at $8.98 per barrel with the highest is United Kingdom at $44.33. In Canada, it is $26.24.
The cost is also low in Iran and Iraq ($10), but higher than $19 in Russia and $23.33 in the U.S.
There is not one generally acceptable estimate of these costs. More recent estimates put the bill at exceeding $60 in the world’s biggest economy.