House to Recover N2.6trn Outstanding Debts Owed FG by Oil Companies

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•To conduct investigative hearing on consolidated inventory, NNPC’s assets

Adedayo Akinwale in Abuja

The House of Representatives has resolved to recover over N2.6 trillion outstanding debts owed the federal government by oil and gas companies.

The resolution of the House followed the adoption of a motion moved by Hon. Ahmed Munir at plenary yesterday.

Moving the motion, Munir pointed out that a recent report by the Nigeria Extractive Industries Transparency Initiative (NEITI) had revealed that 77 oil and gas companies operating in Nigeria were owing the federal government over N2.6 trillion.

The lawmaker stressed that the debts accrued from failure of the firms to remit Petroleum Profit Tax, Company Income Tax, Education Tax, Value Added Tax, Withholding Tax, Royalties, Penalties and Concession on rentals to the federal government.

Munir expressed concern that such a huge debt was being overlooked at a critical time when the country needs funding for its annual budget.

He said, “If debts are recovered, the money could be used to service some of the federal government’s debts as well as fund up to 16.2 per cent of the 2022 budget deficit.”

The lawmaker stated that recovery of the debts was critical in this period of dwindling revenues especially as the Covid-19 pandemic has grossly affected the country’s economy.

The House therefore urged, “NEITI, the National Oil Spill Detection and Response Agency (NOSDRA), and the Federal Inland Revenue Service (FIRS) to provide necessary data needed to facilitate recovery of debts owed the federal government by oil and gas companies.”

It also mandated the Committee on Finance to liaise with relevant agencies to ensure that the 77 oil and gas companies pay the respective accrued debts to the federal government.

The House further resolved that there should be a reconciliation of the actual amount owed the government by the oil company and the actual amount owed the companies by the government to determine how much the companies are owing the government.

Meanwhile, the House of Representatives has resolved to conduct an investigative hearing into the consolidated Inventory, Assets, Interest and Liabilities of the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries.

The decision of the House followed the adoption of a motion moved at plenary yesterday by Hon. Ibrahim Isiaka on the need to ascertain the total consolidated inventory, assets, interests and liabilities of NNPC and its subsidiaries before transfer to the NNPC limited to ensure a Glossary Accounting System.

Moving the motion, Isiaka said the NNPC was established on April 1, 1977, as a merger of the Nigerian National Oil Corporation and the Federal Ministry of Petroleum and Energy Resources.

The lawmaker also said the NNPC was empowered to manage the joint venture between the federal government and several foreign multinational corporations with assets and interests on land, swamp, continental shelf and deep waters.

Isiaka stressed that in 1988, the NNPC was commercialised into 12 strategic business units covering the entire spectrum of oil industry operations including exploration and production, gas development, refining, distribution, petrochemicals engineering and commercial investments among others.

Isiaka said Section 53 (3) of the PIA, which vests ownership of the NNPC on the federal government through the Ministry of Finance, which are both financed by the Nigerian people, but recognises NNPC limited as an agent.

He pointed out that Section 88 of the 1999 Constitution as amended empowers the National Assembly to carry out investigations into matters to which it has powers to make laws.

Isiaka stressed the need to boost investors’ confidence and enhance transparency and efficiency in the supply chain management of the newly established NNPC owing to the outstanding credit sales and the much-needed revenues by the federal government to support annual budgets;

The House therefore mandated, “the Committees on Finance, Petroleum Resources (Upstream), Petroleum Resources (Downstream) and Gas Resources to conduct investigations into the consolidated Inventory, Assets, Interest and Liabilities of the Nigerian National Petroleum Corporation and its subsidiaries to ensure a legitimate transition process of NNPC/NNPC Limited and report back within eight (8) weeks for further legislative action.”