The Nigerian National Petroleum Corporation (NNPC) retained 66 per cent of sales proceeds in the second half of 2015, a new report by Natural Resource Governance Institute (NRGI), a UK based natural resources accountability group has disclosed.
The report which was released on Thursday, noted that what the Corporation retained for the period under review was 12 per cent higher than what it retained between 2013 and 2014.
The report entitled “NNPC still holds blank check” also showed that the NNPC has continued to withhold billions of dollars in oil sale revenues from the treasury. It noted that the corporation still holds on to oil revenues without effective rules or oversight.
It explained that despite the present administrations resolve to curb graft in Nigeria’s oil industry, the corporation in the second half of 2015 made up to $6.3 billion from sales of export crude, domestic crude and oil from its subsidiary the Nigerian Petroleum Development Company (NPDC), out of which only $2.1 billion was entered in the Federation Account.
“The NNPC retained 66 per cent of sales proceeds from these three types of transactions. This is 12 per cent higher than what it retained between 2013 and 2014,” the report informed, adding that the NNPC has not fully explained the revenue retention, especially revenues retained from NPDC sales and domestic crude.
NNPC’s spending on this scale, according to the report, raises questions about its adherence to fiscal responsibility, especially at a time that public finances are stretched and the government looking for monies to fund its budget.
The report further recommended that the government should establish a clear, legally enforceable rule governing which revenues NNPC can keep and how they can be spent now that it is undergoing reforms, failure of which it noted, oil sector corruption and waste could return to their prior devastating levels.