August 18, (THEWILL) – The Nigerian National Petroleum Company (NNPC) Limited has refuted reports that it owes international oil traders $6.8 billion.
In a statement on Sunday, the company’s Chief Corporate Communications Officer, Olufemi Soneye, said oil trading transactions are commonly conducted on credit, adding that it has been meeting its obligations as its subsidiaries are paying up their obligation on a first-in-first-out (FIFO) basis.
Soneye also faulted claims that NNPC Ltd has not remitted any allocation to the Federation Account since January 2024.
However, the national oil company has shown reluctance in remitting allocation to the Federation Account for years, blaming the development on the subsidy regime.
Checks by THEWILL showed that the NNPC remitted zero allocation to the Federation Account in 2022. However, after exiting the fuel subsidy regime following its removal by President Bola Tinubu, NNPC remitted N123 billion as interim dividend and Production Sharing Contracts (PSC) profit oil to the Federation Account in June 2023. In all, between January and November 2023, it remitted the sum of N4.5trn.
Also, the report of the Federation Account Allocation Committee post-mortem sub-committee meeting signed by the Chairman of Revenue Mobilisation, Allocation and Fiscal Commission, Mohammed Shehu, showed monies unremitted by Revenue Generating Agencies to the coffers of the Federal Government increased to N4.1trn as of June 2024. The report further stated that the NNPC Ltd owes N940.62bn.
But Soneye, on Sunday, said the company and its subsidiaries regularly remit taxes to the Federal Inland Revenue Service (FIRS).
In addition to tax remittances, Soneye said the company also makes payments under the Road Investment Tax Credit Scheme to support road infrastructure development.
On issues concerning the fiscalization of imported petroleum products, the NNPC Ltd. affirmed that it does not play a regulatory role. Instead, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is responsible for such matters. The regulatory body operates independently and is not under the control of the NNPC Ltd.
Titled “NNPC Ltd is not Owing $6.8bn”, the statement reads: “The attention of the Nigerian National Petroleum Company Limited (NNPC Ltd.) has been drawn to a media report that the company is indebted to international oil traders to the tune of $6.8bn and that it has not remitted revenues to the Federation Account since January, among other allegations.
“Consequently, the following clarifications have become necessary:
“That NNPC Ltd. does not owe the sum of $6.8bn to any international trader(s). In the oil trading business, transactions are carried out on credit, so it is normal to owe at one point or the other. But NNPC Ltd., through its subsidiary, NNPC Trading, has many open trade credit lines from several traders. The company is paying its obligations of related invoices on a first-in-first-out (FIFO) basis.
“It is not correct to say that NNPC Ltd. has not remitted any money to the Federation Account since January. NNPC Ltd. and all its subsidiaries remit their taxes to the Federal Inland Revenue Service (FIRS) regularly. This is in addition to payments of CIT to road contractors under the Road Investment Tax Credit Scheme. In all, NNPC Ltd. is the largest contributor to the tax revenue shared every month at the Federation Account Allocation Committee (FAAC).
“On the issue of quality/quantity fiscalization of imported petroleum products, NNPC Ltd. has no role whatsoever as it is not a regulator. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which is the relevant regulatory agency in charge of such issues, is an independent body and does not report to the NNPC Ltd.
“That NNPC Ltd. is not averse to inquiries by the media into issues on and around its operations before dissemination to the public either through the print or electronic channels of communication as the company will, always, gladly take the opportunities to state the facts of the subject matter(s). This is in line with the company’s commitment to the Transparency, Accountability, and Performance Excellence (TAPE) philosophy as emplaced by the Mele Kyari-led management since stepping into the saddle in 2019.”
