Audit-Report-on-NNPC

Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013)
2.7. PMS and DPK Subsidy
$0.98 billion over claim of subsidy by NNPC
Our review of the subsidy documentation revealed that the subsidy due to NNPC between
January 2012 and July 2013 on PMS and DPK import was $8.99billion compared to the $9.97
billion stated by the Reconciliation Committee. The difference was due to the following:
o
o
o
Exclusion of October 2011 - December 2011 subsidy claims of $1.2billion. This does not
relate to the review period of January 2012 to July 2013.
$0.13billion increase in PMS subsidy claimed for the 19 months period.
$0.09billion increase in DPK subsidy claimed for the 19 months period
Duplicated discharges noted in subsidy computations
Our examination of the PMS and DPK import verified by PPPRA revealed that some discharges
were apparently verified and subsidy advised to NNPC more than once.
The repeated subsidy for PMS amounted to N3,709,879,190 ($23,954,796).
The repeated subsidy for DPK amounted to N6,169,502,266 ($39,836,652).
$36.05 million over-statement in PPPRA’s PMS subsidy Payment Advice to NNPC
o Our review of the Subsidy Payment Advice sent by PPPRA to NNPC for discharges between
January 2012 and July 2013 revealed that PPPRA applied the pre-2012 Ex-Depot Price
(N49.51) on some discharges in 2012 instead of the approved Ex-Depot Price of N81.51.
o A total of 174,449,778 litres of PMS was affected in these PPPRA computations.
o The error in computation resulted in an over-statement of PMS subsidy by N5.6 billion
($36.05 million).
Estimated $205 million DPK subsidy over-charge by NNPC
Vanguardngr
o Our review of a sample of the copies of the Pro Forma Invoices (PFIs) issued to the other
marketers of DPK across different geopolitical zones of Nigeria, revealed that the 0ther
marketers bought DPK from NNPC/PPMC prior to arrival at NNPC depot in Nigeria at
N40.90.
o The marketers are thereafter required to incur the Lightering expenses 10 , NPA charges, Jetty
Throughput Charge and Storage Charges before bringing the product into Nigeria.
o Subsidy is calculated as Landing Cost minus Ex-Depot Price;
10
NNPC claimed that this cost is incurred by both NNPC and the marketers. For the purpose of this report, we have
considered this cost as a cost incurred by the marketers. Over-charge of subsidy above depends on PPPRA’s decision to
either consider this cost in favour of NNPC or in favour of marketers of kerosene.
Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation.
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