Senate probes NNPC diversion of $1.05bn NLNG dividend

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The Senate yesterday mandated its Committee on Gas Resources to investigate an alleged diversion of $1.05 billion by the Nigerian National Petroleum Corporation (NNPC).

The Group Managing Director of the NNPC, Mr. Maikanti Baru, had last week, told the Senate that the oil corporation was utilising the fund to augment under-recoveries in the importation of Premium Motor Spirit (PMS), claiming that the landing cost of the product was higher than the government control price of N145 per liter.

Baru while appearing before the Senate ad-hoc committee set up to investigate alleged $3.5 billion subsidy fund, hinted that the fund was sourced from the Nigeria Liquefied Natural Gas (NLNG) dividend funds.

According to the NNPC boss, the decision was taken at the height of last fuel scarcity experienced by the country between December 2017 and January 2018.

He said the oil company acted in line with a directive from the National Assembly “to do everything necessary to end the scarcity of fuel in the country.”

Baru further argued that the decision was also in line with section 7 (4)(b) of the NNPC Act which mandates it to fund its operations from its revenues.

“It is noteworthy to mention that the NNPC represents the Federal Government, which holds 49 per cent stake in the NLNG shareholding,” he had said.

In a statement on Monday, the President of the Senate, Bukola Saraki, said that it was illegal for the NNPC to unilaterally draw from the NLNG dividend funds without appropriation by the National Assembly.

Saraki said the dividends paid to the Federal Government from the NLNG business were supposed to be kept in the Federation Account and shared among the three tiers of government.

Consequently, the Chairman of the Senate Committee on Gas, Bassey Akpan, yesterday, raised a point of order at plenary, seeking the permission of the Chamber to carry out a thorough investigation into the withdrawals and spending by the NNPC from the NLNG account.

He pointed out that, utilising the funds without appropriation by the National Assembly, and without the knowledge of state and local governments was an illegal act that should be investigated.

He said: “The Senate Committee on Gas has received several calls, complaints and questions from the general public through phone calls, emails on the basis of what has been trending in the newspapers and social media on the unauthorized withdrawal of over $1 billion from the proceeds of the NLNG dividends account by the NNPC.

“The NLNG dividend account belongs to the three tiers of government and comes under the Consolidated Revenue Account. Therefore, any unauthorized withdrawal from the account without the approval of the National Assembly or any other structure of government is illegal.

“I therefore, seek the leave of the President of the Senate, to allow the Senate Committee on Gas to investigate this withdrawal and other withdrawals and the way and manner the account of the NLNG proceeds is treated by the NNPC and report back to the Senate.”

However, the Majority Leader of the Senate, Sen. Ahmad Lawan, said the probe of the 1.05 billion dollar NLNG dividend fund should be left for the adhoc committee, which he chairs and is already looking into the matter.

The 15-member ad-hoc Committee was set up on Oct. 16 to investigate the alleged secret spending of 3.5 billion dollars by the NNPC on fuel subsidy.

Lawan said: “Mr President, I don’t think at this juncture that the Senate Committee on Gas should go and investigate the utilisation of the 1.05 billion dollar from the NLNG dividend fund.

“We are already doing that. But if the committee on gas is to do this, it means our work is over, because we adjourned, NNPC is presenting all their documents to the committee next week.

“We are sitting this afternoon with other stakeholders. So, I personally feel that this will subtract from what we are doing, and I think it will make our work unnecessary.”

But Senator Emmanuel Paulker, disagreed with Lawan on the ground that the matter being investigated by the ad-hoc committee was different from the NLNG fund.

He said: “The ad-hoc committee was set up specifically to look into the alleged spending of 3.5 billion dollars on fuel subsidy. Subsidy issue should not be confused with the issue of the interest that arose from the dividend of the NLNG. So, I believe they are two different issues.

“So, while the ad-hoc committee is going on with their work to identify what NNPC did with the subsidy, I see nothing wrong for the gas committee to investigate the usage of the dividend arising from the NLNG Ltd,” Paulker argued.

Ruling on the matter, Saraki agreed with Akpan and Paulker, saying the gas committee’s probe would be restricted to the utilisation of the NLNG dividend fund.

Saraki said that the dividend issue was beyond the alleged 3.5 billion subsidy payment, and should therefore, be separately investigated by the Committee on gas.

He said: “Who knows, maybe the dividend is also being used for other things, may be for recurrent expenditure, we don’t even know. I think the ad-hoc committee’s investigation is wide, and Sen. Akpan is talking about dividend of NLNG being used for subsidy.

“Could it be that the fund is also being being used for other things as well? I think they are two separate issues.”

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