1. The office of the Accountant-General of the Federation (OAGF) should

account for the sum of N213.678 Billion, being total of excess payments
made by it over and above what PPPRA identified as paid in 2009 and
2010. The OAGF is not only responsible for the accounts of the
Federation including the PSF and Domestic Crude Account but refused to
provide further details on the account when requested to do so during the Public Hearing.

2. Relevant Anti - Corruption Agencies should ensure that the OAGF
accounts for the over-recovery figures of NGN 2.766Billion and NGN5.27Billion respectively.
2.05 Conflicting Figures for Nigeria National Petroleum Corporation(NNPC)
NNPC had two sources of recovery of its subsidy viz:
(i) Direct Deductions from Domestic Crude receipts accruable to the Federation.
(ii) Payment by CBN through deduction from Distributable revenues as per the Federation Account Component Statement.158
NNPC’s in its submission claimed to have earned N586 Billion as subsidy
from the supply of 7,576,726,157 litres of PMS in 2011.
However, by PPPRA’s presentation, NNPC was paid a subsidy of N667.533
Billion for supplying 5,470,007,111 litres of PMS
By CBN’s presentation, NNPC was paid the sum of N844.944 Billion as
subsidy in 2011.

In addition to CBN’s payment of N844.944 Billion as represented on the
Federation Account Component Statement, NNPC made a direct deduction of N847.942 Billion as subsidy in 2011, bringing all claims by NNPC on subsidy in 2011 to N1,692.886 Billion (N1.692 Trillion).


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The Committee wishes to thank the Leadership of the House of
Representatives for the confidence and support while the assignment
lasted. Also, worth thanking are all Nigerians, Companies, Unions etc.
who either openly or privately offered their services/support to the
We also express our gratitude to the media for their very intensive
and consistent support especially Channels Television for bringing the
proceedings of the Public Hearings of the Committee live to Nigerian
The Committee can affirm that almost all the critical questions/issues
raised at the beginning of this investigation have been answered
conclusively. However, those not conclusively answered as a result of
time and technicalities involved, are being recommended for further
inquiry/action. For instance, it is safe to say that the daily consumption
of PMS by Nigerians is 31 million litres while that of Kerosene is 10
million as against other incoherent figures being branded by relevant
The cost of importation per litre is determined more by the Platts
price. However, the over padding and wastage imbedded on the
template hitherto being used by PPPRA encourages higher landing 204
cost. This is why the Committee recommendation on urgent review of
the constituents of the template should be implemented without delay.
The sum of N2, 657.087 trillion was paid as subsidy as at December,
in 2011 and the process of approvals (pre-qualification, allocation,
verification, certification and payment) are all but flawless.
The difference between N2, 657.087 trillion paid as at December 2011
and N245 billion Appropriated (900%) is the extra-budgetary approvals
and payment by the operators of the PSF Scheme and which
tantamount to gross Constitutional breach.
The state of our refineries is nothing to write home about as it appears
that greed, corruption etc among operators in the downstream sector
colluded to strangulate the refineries despite their total installed
refining capacities of 446,000 BPD.
The daily allocation of 445,000 bpd to NNPC for domestic consumption
if well managed and harnessed has the potentials of satisfying the
daily PMS and DPK needs of Nigerians. (see the Committee
We also express our profound gratitude and appreciation to the
Leadership and Honourable Members of the House of Representatives
for giving us maximum support without hindrance or interference
throughout the course of this assignment.205
Finally, the Committee wishes to acknowledge the support and
encouragement of all Nigerians which provided the needed impetus to
accomplish this task.
Thank you.


2.08 The following Points are Worthy of Note:
Based on the subsidy payments to the Marketers alone of N894.201
Billion in 2011, with the demurrage and all other items on the template
inclusive, at an average subsidy rate per litre of N77.9, the nation would
have received 11,478,831,835 litres of PMS in 2011 or a daily average
supply of 31,448,854 litres. This simply means that what was paid to the
marketers in 2011 i.e N894.201 Billion was almost enough to satisfy the
nation’s PMS needs.
2.09 Actual Payments of subsidy:
(i) PPPRA’s representation to the Committee claimed that total
subsidy paid in 2011 was N1.348 Trillion.163
(ii) CBN in its presentation to the Committee however confirmed total
subsidy payment of N1.739 Trillion.
(iii) The Accountant-General of the Federation informed the
Committee that total subsidy paid in 2011 was N1.697 Trillion
However, investigations have revealed that total payments and direct
deductions in 2011 in respect of subsidy by the marketers and NNPC,
amounted to N2,587.087 Trillion as captured below:
Payments to Marketers 894.201
Payments by CBN to NNPC 844.944
Direct Deductions by NNPC 847.942
(iii)In 2010, total payments for subsidy were N1.192 Trillion while that
of 2009 was N787.824 Billion.
3.01 The Committee tasked itself to specifically identify marketers and the
transactions that gave rise to claims to subsidy on products that may not
have been brought in. This searchlight on the marketers was informed by
the following:
3.02 The Committee identified that the marketers were often awarded
superfluous quantities of products to supply but often did not meet the


(i) In 2009, only the Petroleum Support Fund (PSF) Account was
operational under the subsidy regime and the marketers were paid a
total of N297.921 Billion as subsidy. PPPRA confirmed the payments as
N129.536 Billion and by implication an over payment by N168.385
Billion. While NNPC made direct deductions of N408.255 Billion, CBN
indicated that it paid NNPC the sum of N81.648 Billion as subsidy. This
brings total payment in 2009 to NNPC to N787.824 Billion.

(ii) In 2010, the PSF Account was used to pay subsidy of N160.047 Billion.
Between Jan – April 2010. From May 2010, subsidy payment was
made from Domestic excess Crude (Naira) Account (DEC A/C).
Between May 2010 to Dec 2010, the sum of N221.880 Billion was
indicated as subsidy paid by the CBN to the Marketers.


(c)In December, 2009, although CBN’s figure of N35.0 Billion tallied with
the direct deduction of N35.0 Billion by NNPC, what PPPRA approved in
that month as subsidy was N20.964 Billion.

2.07. PPPRA in its presentation to the House of Representatives had hinted
that the noticeable upsurge in subsidy payment in 2011 was due not
only to increase in subsidy per litre but also to the computed arrears
due NNPC for HHK discharges. This was established from NNPC’s
submission to be N284.580 Billion. This payment of subsidy arrears on
HHK was an illegality, having been proscribed by a presidential
directive in 2009. NNPC was stopped from further collecting subsidy on
HHK. The Corporation abided by the Presidential directive but
unilaterally reversed the situation without any counter directive or
order from the President.


REPORTED BY CBN IS DIFFERENT FROM DIRECT DEDUCTIONS BY NNPC From information available to the Committee, the illegal practice of
NNPC’s direct deductions from the Domestic Crude receipts started as far
back as 2004. CBN claims that for disclosure purposes, it started
reflecting NNPC’s subsidy claims on the Federation Account Component
Statement from October 2009. A comparison between what CBN claimed
was subsidy to NNPC and what NNPC deducted directly, shows huge
differences. This confirms that the two figures could not have emanated
from the same source. CBN had no business reporting what NNPC
deducted internally. Therefore, CBN’s reported figures cannot be no other
than what it paid.

The following examples suffice;
(a) In October 2009, PPPRA confirmed it approved a subsidy of N22.269
Billion. While CBN confirmed it paid NNPC the sum of N21.649 Billion in
October 2009 as subsidy, NNPC’s direct deduction was N81.326 Billion in the same month.

(b) In November, 2009, PPPRA approved a total of N27.666 Billion vide Ref.
Nos. A./4/4/229/C.33/IV/1026 of 12
the February 2010 for
N21,289,621,388.04 and A./4/4/229/C.33/VII/1241 of 31st January 2011 for N6,377,055,615.88.
While CBN confirmed paying a subsidy of N25.0 Billion to NNPC in November, 2009, NNPC’s direct deduction was N64.246 Billion.

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