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Tuesday, 27 November 2012 00:00
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NNPC reacts on Ribadu report

The Nigerian National Petroleum Corporation (NNPC) has reacted to the report of the Petroleum Revenue Special Task Force (PRSTF), which was headed by Nuhu Ribadu and was presented to the President on 2nd November 2012.

The NNPC rejoinder addresses a number of areas, which included direct deduction of subsidy payments from amount due to the Federation Account and discrepancy in the pricing of domestic crude, among others.
NNPC said it was within its rights to claim the credits due to it for the subsidy payments pursuant to the requisite certification by PPRA and that it was in fact due N752.77 billion and not N132.7 billion in outstanding subsidy payments.

The corporation stated there were established guidelines for the selection of companies for the lifting of Nigerian crude oil and that the guidelines are strictly adhered to and regularly publicized.
On exchange rates used to remit payments to the Federation Account, NNPC said it always used the applicable exchange rate advised by CBN in computing funds to be remitted to the Federation Account.
The corporation, while commenting on utilisation of domestic crude allocation, said it paid for all domestic crude allocation at prevailing international market prices and in line with the general terms and conditions for sales and purchase of Nigerian crude oil grades. 

On its crude oil sales and sales to traders without formal contracts, NNPC said it maintains a mixed bag of trading companies to facilitate wider market circulation and penetrate into new (captive-niche) markets.
These include international traders, indigenous traders, international refining companies, NNPC subsidiaries and international trading joint ventures. All terms and conditions of payment, they said, are based on the same general terms and conditions for the sale of Nigerian crude oil.
The corporation pointed out that on the price of feedstock gas to Nigeria Liquefied Natural Gas (NLNG), the Task Force did not obtain the gas supply and sales agreements or it would have been able to understand the basis for the pricing of the feedstock gas to NLNG.

NNPC said: “The Task Force wrongly compared the price of feedstock to the price of re-gassified product. It also erroneously assumed that there is a single international price for either feedstock or re-gasified product."
NLNG had also denied the conclusions of the Task Force.
On NNPC's role in petroleum revenues, the corporation said the allegation that NNPC increasingly relied on the Federal Government for lines of credit, which includes formal and informal loans and deduction of oil revenue due to the Federation Account was wrong.  

The corporation said that NNPC, in line with the policy of the Federal Government to encourage commerciality of NNPC's operations, has not relied on the Federal Government for loans and credit lines but has instead sought innovative means of financing its operations.