Why NNPC owed N23.4 billion export supervision fees for eight years – Official

The Nigerian National Petroleum Corporation, NNPC, on Tuesday blamed budgetary appropriation constraints imposed by the National Assembly as reason for its inability remit N23.4 billion Nigerian Export Supervision Scheme, NESS fees since 2008.

NESS fees are payments to pre-shipment inspection agents and monitoring and evaluation agents in respect of their supervision of crude oil and gas exports.

With such payments, Clean Certificate of Inspections, CCI, are generated for exporters as permit to carry out export activities.

At the end of each reconciliation, agreed NESS fees payable are signed off by stakeholders to close the transaction.

But, Group Managing Director of NNPC, Maikanti Baru, said on Tuesday the fees payable by the corporation accumulated since 2008 due to budgetary appropriation constraints imposed by the National Assembly.

Mr. Baru spoke while appearing before the Senate Joint Committee on Finance, Trade and Investment, Gas, Petroleum Upstream, Banking, Insurance and other Financial Institutions, Judiciary, Human Rights and Legal Matters, and Customs and Excise.

He was represented by the Managing Director, NNPC Capital, Godwin Okonkwo, at the one-day investigative public hearing on Pre-Shipment Inspection of Export Activities in Nigeria.

The National Assembly, he said, had always budgeted N20 million for NESS Fees, pointing out that NNPC lacked any legal right to remit any amount above the appropriated sum once it was exhausted.

Mr. Baru said the NNPC was normally charged 0.15 per cent Free On Board, FOB, value of export as NESS fees for the export of crude oil and gas on behalf of the federal government.

“NESS budget is appropriated in the yearly National budget. NNPC-NAPIMS (National Petroleum Investment and Management Services) administers the budget and payments under the scheme. Crude Oil Marketing Division, COMD provides the lifting profiles and the actual price to compute the FOB export value,” he said.

Senate President Bukola Saraki who was represented by the Senate Majority Leader, Ahmed Lawan, said the Senate was committed to taking steps to promote transparency and accountability of all public and private institutions that transact business with or on behalf of the federal government.

Mr. Saraki said Nigeria was facing a lot of challenges, adding that if the country was good for business, then the laws of the land must be obeyed, stressing that the Senate was in a hurry to move the country forward through legislation.

“This is an opportunity to open the books of Ministries, Departments and Agencies, MDAs to right the wrongs of the past”, the Senate President said.

On his part, the Joint Committee Chairman, John Enoh, noted that the investigative public hearing was to instil probity and transparency in the process of crude oil and gas exports in order to reduce leakages.

He said that Section 11 of the Pre-shipment Inspection of Export Act made provision for repatriation of proceeds after 90 days, although most exporters of crude oil and gas were contravening the provisions.

Mr. Enoh urged all stakeholders to make meaningful contributions towards the realization of the objectives of the Joint Senate Committee, noting that any submission targeted at misleading the Committee would be sanctioned.

The Federal Government enacted the Pre-shipment Inspection of Export Act No. 10 of 1996 to ensure the exportation of quality goods through inspection of all export products, which gave rise to the Nigerian Export Supervision Scheme, NESS.

Its responsibility was extended to cover crude oil and gas exports in 2008.