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       #Post#: 54--------------------------------------------------
       We’re not aware of NNPC’s $3.5 billion subsidy fund – Finance Mi
       nistry tells Senate
       By: sparrow Date: November 1, 2018, 4:18 pm
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       The Federal Ministry of Finance has denied knowledge of a $3.5
       billion fund allegedly kept and utilised by the Nigeria National
       Petroleum Corporation (NNPC) for fuel subsidy.
       The Permanent Secretary, Mahmoud Isa-Dutse, gave the ministry’s
       position when he appeared before the Senate ad hoc committee
       probing the allegation in Abuja on Thursday.
       Mr Isa-Dutse’s claim appeared to corroborate the Group Managing
       Director of the NNPC, Maikanti Baru, who restated the agency’s
       denial that it had no such fund in its custody.
       The News Agency of Nigeria (NAN) recalls that the allegation
       emanated from the Minority Leader of the Senate, Abiodun
       Olujimi, at plenary on October 16.
       In a point of order, Mrs Olujimi had alleged there was a $3.5
       billion “Subsidy Recovery Fund being managed only by the GMD and
       Executive Director, Finance, of the NNPC”.
       It was on the basis of that allegation that the Senate set up
       the committee, chaired by the Majority Leader, Ahmed Lawan.
       Mr Isa-Dutse said the ministry was only aware of the outstanding
       payments under the old subsidy regime, being handled by the Debt
       Management Office (DMO).
       “As far as the current fuel importation regime is concerned, the
       Ministry of Finance does not have any account it is operating.
       “We are not aware of the alleged $3.5 billion fund, and we do
       not maintain any subsidy fund account,” he said.
       The NNPC had earlier denied the $3.5 billion subsidy fund claim
       in a statement on October 17.
       The GMD explained on Thursday that the agency was only utilising
       a revolving fund of $1.05 billion to defray the cost of
       under-recovery in the importation of fuel.
       Asked by the lawmakers to differentiate between subsidy and the
       “cost of under-recovery”, Mr Baru said subsidy was usually
       captured in the national budget, while the latter was not.
       The $1.05 billion, according to him, is part of the NNPC’s
       operational costs.
       He said the money was sourced from the corporation’s share
       dividend in the Nigeria Liquefied Natural Gas (NLNG) and
       domiciled in the Central Bank of Nigeria (CBN).
       Mr Baru explained that the action was in line with section 7
       (4)(b) of the NNPC Act, which mandated it to defray its
       operational costs from its revenue.
       “This 1.05 billion dollars is being administered under a
       steering committee that was set up, and a working committee that
       handles daily operations of this fund.
       “These committees comprise representatives of the Minister of
       Finance, Minister of State for Petroleum Resources, Accountant
       General of the Federation, CBN, Petroleum Pricing Regulatory
       Agency, Petroleum Equalisation Fund Management Board,
       Directorate of Petroleum Resources and the NNPC.
       “The fund is being transparently administered according to laid
       down processes and governance.
       “I would like this honourable committee to note that the actions
       of NNPC were in compliance with the National Assembly directive
       that NNPC, as the supplier of last resort should, and has,
       maintained robust petrol supply and distribution to the nation.
       “Currently, no other oil company imports petrol due to the high
       landing cost above the N145 per litre price ceiling on sale of
       the product, and also due to the lack of provision for subsidy
       in the Appropriation Acts since 2016,” he explained.
       The GMD assured the committee that the NNPC would continue to
       guarantee energy security in the country by maintaining PMS
       supply at the approved pump price of N145 per litre, except
       directed otherwise.
       When Mr Lawan requested documents to back up his claims, Mr Baru
       said they were not immediately available and asked for one month
       to present them to the committee.
       But the lawmaker gave him two weeks to furnish the committee
       with the documents, and adjourned the hearing till November 6.
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