NNPC defaulting in payment of bridging claims to PEF — NEITI
The Nigerian Extractive Industries Transparency Initiative, NEITI, has accused the Nigerian National Petroleum Corporation, NNPC, of failing to remit to the Petroleum Equalisation Fund Management Board, PEF(M)B, bridging allowances for a significant number of years.
In its Fiscal Allocation and Statutory Disbursement, FASD, Audit for 2012 – 2016, obtained yesterday, NEITI stated that PEF had been unable to make the NNPC to pay for the amount it owed.
Though it did not state the amount the NNPC owed and the period over which the NNPC had defaulted, NEITI said PEF received N381.888 billion from major and independent oil marketers and the Pipeline and Petroleum Marketing Company PPMC, from 2012 and 2016.
According to the NEITI report, a total of N499 billion was received by PEF Management Board (MB) throughout the review period, 2012 to 2016, with N382 billion realised from Bridging allowance; while most of its expense was on claims amounting to almost N303.4 billion.
It noted that receipts in 2012 was N76.8 billion, increasing by 84 per cent to N141.66 billion in 2013, but decreased by 23 per cent to N109.6 billion in 2014.
The report added that receipts also increased by 56 per cent in 2015 to N170.83 billion, while it noted that financial statement for the year 2016 was yet to be finalized and therefore was not included in the analysis.
NEITI said, “With emphasis on NNPC; the fund finds it extremely difficult to ensure that NNPC pays the amount owed to the Fund and as a result, the Fund has outstanding huge amount receivables from NNPC for a number of years.”
The report further stated that while the NNPC remitted N13.535 trillion to the Federation Account from 2012 to 2016, it failed to remit to N373.878 billion to the federation over the same number of years.
In addition to the NNPC default, NEITI said it observed that PEF does not impose penalties promptly on defaulting independent and major oil marketers who failed to pay their contributions.
It added that PEF paid claims to major and independent oil marketers only after deducting the contributions and allowances due from the marketers to PEF(M)B, noting that in some cases, bridging claims were paid to some independent oil marketing companies without deducting the National Transportation Average, NTA, contribution due from them.
“When a marketer makes payment to the Fund resulting from the outstanding amount due, the Fund does not have a system to verify what transactions the amount paid relate. Detailed description is also not included in the bank statement.
“Utilization of the Fund is not separated between the core activities and administrative purposes,” it noted.
To address these concerns, NEITI recommended “That the utilization of the Fund’s resources be disaggregated between primary activities, which include settlement of claims and receipt of NTA contributions, from the conventional administrative activities for management of Fund expenses.
“We recommend that management of PEF(M)B should have an aging analysis stating the period to which a marketer can be indebted. After these periods, we recommend that the management should not honor any claims due to independent or major oil marketing company until that company settles all previous indebtedness to PEF(M)B.
“It is also recommended that management should have a comprehensive schedule showing the list of marketers as well as the amount due from each marketer. We recommend that a competent staff be responsible for reconciling the amount paid by the marketers to the transactions to which the amount was due.
NEITI described bridging allowance as the payment made by all licensed importers and marketers to PEF, adding that it is paid on the quantity of petroleum imported into the country. Currently, it disclosed that the rate is N6 per liter of imported petroleum products.
PEF is saddled with the responsibility of administering uniform prices of petroleum products throughout the country. This is achieved by reimbursing a marketer’s transportation differentials for petroleum products movement from depots to their sales outlets in order to ensure that products are sold at a uniform pump price throughout the country.
The source of the fund is from the net surplus revenue recovered from oil marketing companies.
SOURCE: vanguardngr.com
