NNPC, Custom, Others Withheld N1.6 Trillion From Federation Account In 2017

By Chuks Ekpeneru

A report from the Auditor-General of the Federation, Mr. Anthony Ayine, has revealed how the Nigerian National Petroleum Corporation, the Customs, and some other government revenue agencies failed to remit the sum of N1.555 trillion into the Federation Account in 2017.

The Auditor-General’s Report of 2017, posted on the organisation’s website also named the Department of Petroleum Resources (DPR) and the FIRS as defaulters.

The report says that “total revenue inflows to the Federation Account from the various Collecting Agencies from Central Bank of Nigeria (CBN) Component Statements for the period under audit amounted to N6.422 trillion. The AuGF noted that from a total revenue of N2.407 trillion payable to the Federation Account by Nigerian National Petroleum Corporation (NNPC), it deducted the sum of N1.332trillion for Joint Venture Cash Call (JVC) before paying the resulting net figure of N1.075 trillion into the Federation Account.

The AuGF said the Department of Petroleum Resources (DPR) collected the sum of N733.054 billion but paid a net figure of N706.283 billion to the Federation Account after deducting excess proceeds on Royalty of N26.770 billion.

“Similarly, a total amount of N2.653 trillion was generated by FIRS for the period under audit. However, the actual amount paid into the Federation Account was N2.457 trillion after deducting N196.537 billion being the total excess proceeds on royalty.

“Similarly, he pointed out that Customs collection according to the AuGF 2017 report, stood at a total of N628.033 billion for the period under review.

A breakdown of this amount put Import Duty at N531.795 billion; Excise Duty N 45. 630 billion; Fees N2.133 billion; Penalty Charges N3.565 billion CET Levy N48.470 billion; Auction sales N3.574 billion.

He said the failure of the agencies to remit their full revenue contravened the provisions of Section 162 (1) of the 1999 Constitution which stipulates, “The Federation shall maintain a special account to be called ‘The Federation Account’ into which shall be paid all revenues collected by the Government of the Federation.

 “This has been a regular subject of my reports being ignored over the years.”

On ways out of the quagmire AuGF, urged the Accountant-General of the Federation to “ensure that all deductions made at source contrary to section 162 of the Constitution of the Federal Republic of Nigeria 1999 (as amended) are stopped.” He added, “Any payment to be made from Federation Account Revenues should be made by the Federation Account Allocation Committee (FAAC) and not by any collecting Agency. Defaulting agencies should be appropriately sanctioned.”

According to the audit report, the Department of Petroleum Resources in the year under review breached several legislative frameworks leading to the loss of revenue, with outstanding amounts in respect of royalty, rent, gas flare penalty, and charges, among others amounting to $3.214 billion or about N980.277 billion.

Mr. Ayine said the “Review of documents relating to outstanding royalty, gas flare penalty, gas sales royalty and concession rental due from oil and Gas Companies showed that the sum of $3.214 billion was not collected by DPR as and when due.

He added that “Various Oil and Gas Companies had outstanding revenues for the year 2017. These oil companies have failed to discharge their obligation to pay royalty, rent and other rates prescribed by Petroleum (Drilling) and Regulation, of 1969 and Petroleum Act 1969.”

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