Sharp practices and fraudulent diversion of revenues have continued to pervade the operations of the state-owned Nigerian National Petroleum Corporation. Recent news indicates that $4.72 billion in dividends paid into the corporations offshore account with J P Morgan Bank have still not been accounted for, one year later. Moreover, the Revenue Mobilisation Allocation and Fiscal Commission and Nigeria Extractive Industry Transparency Initiative, in separate presentations to the House of Representatives Joint Committee on Finance, Petroleum (Upstream and Downstream) and Gas Resources, on November 1, claimed that the NNPC used an arbitrary exchange rate in crediting the Federation Account, instead of the official rate fixed by the Central Bank of Nigeria. The exchange rate differential, according to RMAFC Chairman, Elias Mbam, translated into a shortfall of over N12 billion in Federation Account accruals between January and September this year.In an arbitrary and cavalier violation of the 1999 Constitution, Mbam claimed that the NNPC pays revenue from its domestic crude oil and gas into its operational accounts and subsequently directs the CBN to transfer specific amounts to the Federation Account.Proceeds from export of crude oil and gas are normally paid directly into the Federation Account with J P Morgan but, as Mbam observed, the operation of the account is shrouded in secrecy. In regard to the controversial fuel subsidy deductions, the RMAFC revealed that whereas NNPC is to be paid N81.72 billion from January to September, 2011, as set out in the Appropriation Act 2011, the NNPC has so far deducted N615.67 billion, which shows a difference of over N544.9 billion.Disclosures by the RMAFC and NEITI are quite disturbing. They show that NNPC is operating outside the financial regulations governing the public service and with utter disregard for provisions of the 1999 Constitution, particularly Section 80(1) concerning Powers and Control over Public Funds. That section stipulates that, All revenues or other monies raised or received by the Federation (not being revenues or other monies payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation. As usual, the corporation has publicly denied these allegations. It argued that the figures presented by the NEITI did not capture the nature of transactions as well as the current realities on ground.It is unfortunate that the Federal Government has allowed the NNPC for so long to function with scant regard for basic accounting standards and practices and the laws of the country. On October 17, 2011, the Auditor-General of the Federation, Mr. Samuel Orkura, told lawmakers that the accounts of the NNPC had not been audited for several years. NNPC responded with insults and unconvincing tales, and has since returned to business as usual.The Senate Committee on Petroleum Downstream had equally condemned the accounting practices of the NNPC in January 2008. A member of the committee, Senator Heineken Lokpobiri, said: The NNPC itself is a problem because we dont know how much the NNPC is appropriating; we dont know how much the NNPC is spending.At the First National Gas Summit in Abuja, on July 26, 2010, NNPC was carpeted as its top executives who were present at the event could not provide any coherent explanation about $4.72 billion paid as dividends by NLNG to the corporation in respect of Federal Governments 49 per cent equity holding in the firm.Are there no channels for punishing irregularities or fraud with regard to the NNPCs accounting activities' The lack of will on the part of The Presidency and Ministry of Petroleum Resources to compel NNPC to submit to the demands of transparency and accountability reinforces a feeling among well-informed Nigerians that the corporation is serving the interests of some highly placed citizens rather than those of the nation. It should be of interest to know why a board of directors is not in place for the NNPC or for how long it could operate without one, when its enabling law requires that most of NNPCs undertakings in exploration and production, as well as downstream, must be approved by such a board before they could be executed.Transparency and accountability are needed from managers of the nations oil wealth. As George Soros, founder of the Open Society Foundation, warned, revolts in Libya were partly the result of revulsion against a corruption fed by the misuse of oil money. The National Assembly should conduct a credible investigation into the NNPCs shenanigans and take this opportunity to strengthen transparency and accountability in the downstream oil sector. The RMAFC and NEITI have placed before the House and the Federal Government facts about NNPCs shady operations that should warrant the immediate appointment of independent auditors to thoroughly scrutinise the accounts of the corporation and hold accountable any person involved in irregularities.The government must act decisively and convince Nigerians that NNPC is not bigger than the nation as curiously claimed last week by Petroleum Resources Minister, Diezani Alison-Madueke. The parliament should get to the bottom of the lawlessness and serial frauds at NNPC. Certainly, lawmakers should not allow the Minister and NNPC to carry on in the belief that any agency of the government is untouchable.
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