The Group Managing Director, Nigerian National Petroleum Corporation, Mr. Austen Oniwon, has said that the corporation has never defaulted in its financial commitment to the Federation Account.He said the NNPC had remained diligent in its monthly remittance of oil proceeds to the Federation Account in order to promote smooth operations of the various tiers of government in the country.Oniwon said this at a public hearing by the House of Representatives Joint Committee on Finance, Petroleum Upstream, Petroleum Downstream and Gas Resources over the alleged N450bn indebtedness by the corporation to the Federation Account.Last week, the management of the NNPC had appeared before the committee alongside officials of the Nigerian Extractive Industries Initiative, which alleged that the actual amount involved was N840bn as against N450bn.A statement on Monday quoted Oniwon as saying that the corporation had remained faithful in remitting oil revenues to the Federation Account and was, therefore, not aware of funds allegedly not being remitted into the account by the NNPC."With regard to the request on details of funds not remitted to the Federation Account, the NNPC is not aware of funds not being remitted by it into the Federation Account from inception to date, because crude oil and gas buyers do not pay into NNPC account, but into the oil and gas proceed account managed by the Central Bank of Nigeria," he said.The GMD noted that with respect to the N450bn supposedly owed the Federation Account by the NNPC, prior to November 2003, domestic crude was sold to the corporation at a discount, both in terms of price and exchange rate, saying that petroleum products were also sold at highly subsidised rates.According to him, on October 22, 2003, the Federal Government directed that NNPC should, henceforth, pay the prevailing international market price for the 445,000 barrels per day crude oil meant for domestic consumption. He, however, Oniwon said the petroleum products produced from the crude oil were sold at controlled and highly subsidised prices approved by the government, hence giving birth to the subsidy regime, which he noted had created a major imbalance for the market.He added that the impact of the lopsidedness in the regulated downstream business was usually most severe on NNPC during the period of high international crude oil and petroleum products prices.He submitted that NNPC neither sought for loan nor obtained one from the government, but was asked to be made whole for the imbalance created by the imposed subsidy policy.Oniwon explained that payments for subsidy, which upon government approval, were taken in the form of underpayment of crude oil cost, made up the outstanding.He said, "NNPC has been arm-twisted into reaching an agreement with the Federation Allocation Accounts Committee in respect to the N450bn of subsidy payment due to it; in order to allow peace to reign, we acceded, but we shall at the appropriate time revisit this case to reclaim money rightly due to NNPC, and hope that with understanding of the true position, the honourable members of this joint committee will convince the National Assembly to support NNPC to reclaim what rightfully belongs to the NNPC."He explained further that the proceeds from the NNPCs upstream Joint Ventures and Production Sharing Contract operations on behalf of the Federal Government represented a significant portion of revenues paid to the government."NNPC is aware of the importance of these revenues to the federation and follows strictly the laid down procedures for remittances to the Federation Account and in compliance with extant laws," Oniwon explained.He emphasised that the corporation had conducted all its activities in full compliance with the provisions of the Constitution and in line with the Appropriation Act, 2011.Responding on behalf of the members of the House of Representatives Committee, Co-the Chairman of the committee, Mr. Peterside Dakuku, applauded the NNPC for its comprehensive submission, saying it would go a long way in helping the committee to compile its report.
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