The National
Economic Council (NEC) yesterday called for the probe of the N1.15
trillion outstanding claims of subsidy and related expenditures
presented to the Federal Government by the Nigeria National Petroleum
Corporation (NNPC).

The controversial
money allegedly covered the payment for the goods, movement, and supply
of petroleum products across the country between the 2005 and 2010
financial year.

Speaking after over
five hours of meeting, which was presided over by the Acting President,
Goodluck Jonathan, at the Presidential Villa, Abuja, yesterday, the
minister of finance, Mansur Mukhtar, said the Economic Council has
directed that a thorough audit of the amount of money be carried out to
verify the true state of the subsidy before going ahead to make any
payment to NNPC.

Others present at
the meeting included Delta State governor, Emmanuel Uduaghan; governor
of Ogun State, Gbenga Daniel; and Lamido Sanusi, governor of the
Central Bank of Nigeria (CBN).

“We have been doing
the auditing systematically,” the minister said. “For all payments, we
have an independent auditor that audits whenever the PPRA makes
submissions. That is why the payment circle takes over 45 days. We
submit it to external auditors and they bring it back to us.”

Mr. Mukhtar said
the finance ministry has an invoice from the NNPC for N1.15 trillion
for various expenditures it allegedly incurred on behalf of the federal
government, including cost of crude and products lost owing to pipeline
vandalism and losses incurred from supplying petroleum products at
regulated prices.

“Out of this,
N45billion has not been remitted by NNPC to the federation account,”
Mr. Mukhtar said. “This was in respect to previous months in terms of
February to December 2008, where they were not able to pay. They had to
make direct withholding of the money and, of course, there is about
700billion or so that we are now talking about, in relation to the
outstanding.

When you consider
the size of the capital expenditure of the Federal Government and even
the amount that we have been able to spend over a period, assuming 60%
of the budget execution as at the end of December 2009, for a budget
that is just about N1.1trillion, that is less than what has been used
for the subsidy.”

He said there is
now a need to conduct a process audit, especially in relation to the
movement of the trucks and supplies to the various depot.

“The audits we are
talking about will relate even down to the filling stations and again
that is where the BPR has been trying to make sure that these prices
are enforced, but when you have only about 440 staff responsible for
overseeing 15,000 filling stations, there is no way you can succeed in
ensuring full compliance,” he said. “Even the NNPC claims are being
subjected to very rigorous audit, he added.”

Not enjoying the benefit

Mr. Uduaghan said
that, despite the N35 per litre subsidy being paid by the Federal
Government, the masses who were supposed to be the ultimate
beneficiaries of the subsidy end up not enjoying the benefit.

“All of that we are
going to audit, because all the subsidy ends up in the hands of the
very few,” he lamented. “There is nowhere in the country today where
fuel is sold for N65 per litre. In the Delta areas, fuel is sold for up
to N150. So, who is enjoying the subsidy? A few individuals and we are
saying that this should stop.”

The governor said
the council particularly frowns at the Joint Venture Cash Call (JVCC)
being operated jointly by state governments and the NNPC, and noted
that the Council was of the view that the present arrangement be
reviewed for maximum benefits to the states.

“The other thing
the states are worried about is the Joint Venture Cash Call, in which
money is deducted directly by the NNPC to their joint venture funds.
Last year, for 4-5months, NNPC did not make any contribution to the
federation account. For 4-5 months, there was no money coming from oil
revenue to the federation account because the money that was got by
NNPC is directly paid into the joint venture account and that really
affects us,” he said.

Mr. Daniel, the
Ogun State governor, said the NEC meeting also discussed the new tax
policy, deregulation, the 50-year jubilee of Nigeria, Central Bank of
Nigeria (CBN) initiatives on supporting the real sector of the economy,
and revenue issues in the country.