Oil earnings: Reconciling Jonathan's two ministers 

 

 IF it was meant to douse the raging controversy and tension over shortfalls in the nation's oil revenue
and who exactly to blame for it, the disclosure last week by the Nigerian National Petroleum Corporation (NNPC) that Nigeria generated $20.91billion from crude oil sales in the first seven months of this year achieved only thing- further compounded the confusion. The figure released by the NNPC on crude oil sales for the period under contention did not explain a single thing nor answer a
single question on the controversy. Proceeds
Let's look at this matter: The NNPC agreed it realized $20.91billion from the sale of 191,939, 235 barrels of crude oil from January- July.
The sale statistics of the corporation showed that in the month of January, it realized $4.34bn from 37, 675, 591 barrels of crude oil. In February, $2.36bn was realized from the sale of 20,590,812 barrels of oil. In March, 30, 901,111.67 barrels of oil was sold for $3.35billion.
The earning went down to $2. 58 billion as the produced crude also came down to 25, 116, 194.39 barrels in the month of April. The NNPC recorded $2.98billion as earning in May from 28411,526.25 barrels of oil sold within the month.
In June, it was $2.6billion as earning from the sale of 24,708,531.8 barrels, while in July the corporation realized the sum of $2.69bn from sale of 24, 535468 barrels of oil.
From January to July 2013, the federation was expected to have earned N1.837 trillion (or N204.168 billion per month) from the sale of crude oil and gas. This figure was supposed to be the rake-in after paying for Joint Venture Cash Calls (that is, cost of production) and petrol subsidy payments.
As it has always been, NNPC as the seller was supposed to remit all the revenue generated to the federation account for sharing by the three tiers of government.
However, of the N1.837 trillion realised at the prevailing market rate of crude oil which averaged at about $108 per barrel within the period under review, as the actual revenue both the NNPC and the Central Bank of Nigeria (CBN) endorsed, only N1.516 trillion has been or rather was remitted to the federation account by the NNPC as earnings for the period leaving a deficit of N320.654 billion.
As most of us know, the projected budget crude oil sales revenues have not been realized due to significant shortfall in production blamed on oil theft and pipeline vandalism. The 2013 planned production was 2.45 million barrels per day but the Year-to-Date July 2013 production has averaged 2.19million barrels per day.
Although oil prices have averaged $108 per barrel, which is about $38 per barrel above the 2013 budget benchmark of $79 per barrel, this has not augmented the drop in government revenue.
But this is aside the present controversy because what is being contended between the federal government on one side and the states and local governments on the other is the shortfall in remittance into the federation account of monies already generated.
The NNPC's $20.91 billion revenue figure introduced more confusion in the arithmetic as the corporation did not clarify whether it actually remitted all the monies as generated from crude oil and even natural gas sale or applied part of it elsewhere for genuine or dubious causes.
As rightly said by the Chairman House of Representatives Committee on Finance Hon. Abdulmumin Jibrin, Nigerians are not as keen on crude oil sales figures as the actual remittances from NNPC to the Federation Account. The amount remitted to the federal government is more important and NNPC should have been more honest to present the figures so that Nigerians can understand what actually accrued.
It would be recalled that the controversy over non-remittance of actual accruals into the federation account started when the Nigerian Governors' Forum (NGF) raised alarm that the states have not been getting their due entitlements from the federation account since March this year. As expected, the governors asked the Minister of Finance and the coordinating minister of the economy, Dr Ngozi Okonjo-Iweala to explain the discrepancies or quit his job.
However, the dissident faction of the NGF led by Plateau State governor, Jonah Jang and some National Assembly members loyal to the Jang governors came in defense of the Finance Minister and rather insisted the Petroleum Minister should explain or be sacked.
Since then, the ministries of finance and petroleum resources have tried hard to shift the blame to each other's doorstep. Without bias, whose mandate is it to present monies for sharing by the three tiers of government- finance or petroleum minister?
And why is the Finance Ministry now trying to exonerate itself from this unbalanced accounting when the abnormality as alleged has been running since the first quarter of this year and the ministry did not see any need to raise alarm either to their oga at the top or to alert Nigerians?
Did the Finance Ministry at any of the Federal Executive Council (FEC) meetings report what the NNPC and by extension the Petroleum Minister was doing to shortchange the federation? So what are e saying!
Another curious angle to all these was the transfer of the sum of N35.103 billion to the Excess Crude Account (ECA) in July by the Finance Minister when the same ministry has been alleging that Nigeria is shutting down due to shortfall in oil earnings as projected in the 2013 fiscal appropriation.
How can we have drastic shortfall as trumpeted and at the same time excess earnings to be saved in the excess crude account? So where is this money coming from? Could that be the money the states and the local governments are asking for? The Minister of Finance charged with the responsibility of managing the nation's earnings and expenditures should actually be the one doing the explanation to Nigeria and not the NNPC. Maybe, both the Ministers of Finance and Petroleum should actually educate their oga since they report to one person. Then, the President should take it on from there to correct the impression that his ministers are pulling at cross purposes.