by TOLA AKINMUTIMI AND UDEME AKPAN

…confirms N400bn fraud in fuel subsidy payments

The Nigeria Extractive Industries Transparency Initiative, NEITI, yesterday disclosed that Nigeria’s earnings from oil and gas sector totalled $62.9bn in 2012.diezani-allison-madueke

This is contained in the agency’s audit report which formed part of key highlights of its Independent Audit Report in the Oil and Gas sector during the year.

A breakdown of the revenue profile reflected that $30.3bn was realised from sales of crude oil and gas compared to $26.9bn earned from taxes, royalties and rents.

Also, the report stated that $5.6bn was revenue flow to states, local governments and other entities.

NEITI reported further that the total earnings for the period under review showed a slight drop of $5.5bn, or eight per cent decline, from the $68.4bn earned from the hydro carbon resources industry by the country in 2011.

According to the agency, the aggregate unresolved difference on all the financial flows in 2012 was $47.5m.

The report clarified further that the figure represented 0.075 per cent of the total financial flows from all sources, when compared to 0.14 per-cent recorded in the preceding year.

It added that out of the accrued revenue, N1.3trn was paid as subsidy payment to oil marketers, a figure that showed a difference of N400bn from the actual N690bn paid during the period.

NEITI stated further that 862.7m barrels were disclosed as fiscalised crude oil production at an average daily production of 2.36m barrels per a day during the year under review even as the report hinted that the full report made incisive disclosures on quantity of crude either stolen or lost due to vandalism and other operational disruptions in 2012.

It would be recalled the oil and gas audit for the year 2012 was inaugurated in May 2014 by NEITI as part of its national and global mandate in the implementation of the Extractive Industry Transparency Initiative in Nigeria, EITI.

The exercise covered financial, physical and process issues under the new EITI standards.

The 2012 oil and gas industry audit was the fifth in NEITI’s cycle of audits in the oil and gas sector since it started operating in 2004 as a member of the global EITI.

The previous audits covered the periods 1999-2004, 2005, 2006-2008 and 2009-2011.

Meanwhile, daily subsidy payments on fuel by the Federal Government dropped from N1.4bn to N1.2bn between March and April, this year as a result of a slight fall in the prices of crude oil.

Unlike March when the average price of crude hovered at about $60 per barrel, the price of the commodity currently stands at over $50 per barrel, meaning that refiners, who pass the costs to consumers, spent less to procure and process petroleum products, including petrol.

Based on the domestic need of about 40 million litres daily, government is expected to spend about N31.65 as subsidy per litre in April, 2015.

The Petroleum Products Pricing Regulatory Agency, PPPRA confirmed the situation in its latest template which puts the landing cost, including cost and freight, traders margins, lightering expenses, Nigerian Port Authority, financing, jetty depot thru put charge and storage at N103.16 per litre.

The agency puts distributors’ margins, including retailers, transporters, dealers, bridging fund, marine transport average and admin charge unchanged at N15.49 per litre, thus amounting to N118.65, while the ex-depot price and subsidy at N77.66 and N31.65 respectively, before arriving at the regulated price of N87 per litre.

The PPPRA had put the landing cost, including cost and freight, traders margins, lightering expenses, Nigerian Port Authority, financing, jetty depot thru put charge and storage at N106.73 per litre in March, this year, adding that distributors’ margins, including retailers, transporters, dealers, bridging fund, marine transport average and admin charge unchanged at N15.49 per litre.

This amounted to a total cost of N122.22, showing an increase of N23.04 higher than the February, 2015 total cost.

Investigations showed that the Federal Government’s fiscal situation had been worsened by the devaluation of the naira, which indicated that marketers needed more local currency to import fuel.

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