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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) 7. We applied an exchange rate of $1 = N154.87. Thus, the over deduction of subsidy is calculated as follows: Description Subsidy Over Charge Amount N Volume Sold to Other marketers * Other Landing Cost Components paid by Other marketers STS Volume Sold to Other marketers 3,686,811,097 litres (See Appendix 6.1.26) Other Landing Cost Components paid by Other marketers N8.55 (See Table D7 above) Subsidy Over Charge 3,686,811,097.20 * N8.55 Subsidy Over Charge N31,522,234,881.06 Subsidy Over Charge $203,539,968 using an exchange rate of $1 = N154.87 Table D8: Estimate of DPK Subsidy over deduction by NNPC; Source: PPPRA Pricing Template, PPMC’s records of DPK imports; PPMC’s records of DPK sales to other marketers, Sample of PFI received from PPMC 4.4.5. Summary of Findings Summary of findings 12 10 8 6 4 2 0 Reconciliation Committee $9.97 bn Value $1.28 bn $8.69 bn Decrease Verified subsidy Section Adjustm ent ($bn) 4.4.4.2.1 0.13 4.4.4.2.2 0.09 4.4.4.2.3 (1.20) 4.4.4.3 (0.02) 4.4.4.4 (0.04) 4.4.4.5 (0.04) 4.4.4.6 (0.20) T otal (1.28) Vanguardngr Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 74
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) 4.4.6. Other Findings 4.4.6.1. PPMC is the sole importer of DPK in Nigeria and sells Offshore Lagos at an amount higher than the Regulated/Official Ex-Depot Price Per PPPRA, the expected/official retail price of DPK in Nigeria is N50. This comprises the following: Description Amount N Ex-Depot Price/Litre 34.51 Margin to stakeholders/Litre 15.49 Official Retail Price/Litre 50.00 Table D9: Analysis of the Official Retail Price of DPK; Source: PPPRA HHK Pricing Template The Ex-Depot Price is the expected/official price at which DPK should be sold at NNPC’s depot in Nigeria. The Margin to stakeholders includes the following: Description Amount N i. Retailers margin/Litre 4.60 ii. Transporters Margin/Litre 2.99 iii. Dealers margin/Litre 1.75 iv. Bridging Fund/Litre 5.85 v. Marine Transport Average (MTA)/Litre 0.15 vi. Admin Charge/Litre 0.15 Distribution margin to stakeholders 15.49 Table D10: Analysis of the distribution margin on DPK; Source: PPPRA HHK Pricing Template Per PPMC, DPK was sold before arrival in Nigeria, to other marketers between January 2012 and July 2013 at N40.90. Apparently, this is above the official ex-depot price of N34.51 after arrival in Nigeria. PPMC confirmed to us that the N40.90 selling price to other marketers includes the Official Ex-Depot Price – N34.51, Bridging Fund per litre – N5.85, Marine Transport Average (MTA) per litre – N0.15 and the Admin Charge per litre – 0.15, indicated as iv, v, and vi in Table D10. PPMC did not provide explanation for the balance of N0.24. The sales of DPK to Other marketers outside Nigeria are handled by the Inland Sales Department of PPMC. Vanguardngr Each sale of DPK by PPMC to the Other marketers is evidenced by a Pro Forma Invoice (PFI) prepared and signed by PPMC stating the volume and the price at which a litre of DPK is sold (Please see Exhibit D6 for a sample of the Pro Forma Invoice (PFI)). Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 75
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