Audit-Report-on-NNPC

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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) Table G6 – Summary of Refined Products Losses 4.7.4.2.3. Valuation of product losses using Ex-depot price NNPC adopted the ex-depot price (per litre) for refined petroleum products to value the product losses during the review period. The conversion rates used were; PMS at N87.66/litre DPK- N40.9/litre and; AGO at N126/ litre The Ex-Depot price is the selling price for petroleum products at the depots nationwide plus other unavoidable charges such as the bridging funds, marine transport agent cost and administration cost (depending on the product), as shown in the table below; Product PPPRA Exdepot price NNPC Price Other charges Ex-Depot Price used by PwC PMS N81.51/litre N87.66/litre Bridging fund N5.85/litre N87.66 Marine Transport Average (MTA) N0.15/litre Administrative charge N0.15/litre Remarks DPK N34.51/litre N40.9/litre Bridging fund N5.85/litre N40.66 Yet to Marine Transport Average (MTA) N0.15/litre account for N0.24 used Administrative charge by NNPC to N0.15/litre arrive at N40.9/litre AGO N/A N126/litre N/A N126/litre N/A Table G7 – Product Losses Unit cost Valuation We also adopted the ex-depot price, considering that it would ordinarily be the price at which NNPC would have received petroleum products from the marketers after all unavoidable charges have been paid, if the petroleum products were not lost in transit. This implies that NNPC can still claim Subsidy from the total refined petroleum products including that for the product losses. Vanguardngr However it was observed that NNPC valued the lost DPK at N40.9/Litre, which is yet to be explained as shown in the table above. The components of the cost are the official selling price at N34.51/litre and other unavoidable charges (Bridging fund, Marine Transport Average and Administrative charges) at N6.15/litre, thereby summing up to N40.66/litre and not N40.9/litre used. We used N40.66/Litre for our valuation which led to a difference of N11,249. 4.7.4.2.4. Refined product losses: Casting errors and arithmetical inaccuracy There were no third party supporting documents for the difference in quantities for the refined petroleum product losses. Using the monthly reports from NNPC operation area for January to Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 102
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) December 2012, the total quantity lost was 231 litres (valued at $97,037) lower than the quantities stated on NNPC’s schedule. For January to July 2013, there were arithmetical errors in the schedule for PMS losses, as provided by NNPC. The casting of the schedule was N9,616,927 ($54,713) higher than the amount on the schedule provided. Period Variance in Variance in Value $ Volumes(litres) January to December 2012 231 97,037.33 January to July 2013 0 (54,713.44) Table G8 – Casting errors noted on PPMC’s schedule of refined product losses 4.7.5. Summary of findings Summary of findings 1 0.8 0.6 0.4 0.2 0 $0.84 bn Value $0.07 bn $0.7 6 bn Increase Reconciliation Committee Section 42,323.89 Adjustm ent ($bn) 4.7 .4.1 0.07 39 4.7 .4.2 0.0004 T otal 0.07 43 NNPC claimed the sum of $760million for crude oil and refined product losses. The losses were described as differences between the quantities of crude oil pumped at the terminals and received at the refineries and/or depots, and the difference between the quantities delivered and received after inter-depot transfers due to pipeline vandalism, spillage, low pressure pump etc. Vanguardngr Our expected value of the losses is $73,893,468.82 higher than the NNPC’s submission DESCRIPTION NNPC’s PwC Figures Variance $ Submission Crude Oil Losses (465,809,662.68) (539,660,807.61) 73,851,144.93 Product Losses (296,047,770.17) (296,090,094.05) 42,323.89 TOTAL (761,857,432.85) (835,750,901.66) 73,893,468.82 Table G8 – Summary of balances of Crude and Product Losses Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 103
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