The House of Representatives has commenced processes to recover N2.6trillion debt owed to the Federal Government by oil and gas companies operating in Nigeria.
The green chamber on Wednesday consequently constituted an adhoc committee to interface with no less than 77 oil and gas companies operating in the Country towards recovering the sum.
The ad-hoc Committee chaired by the Deputy Chief Whip of the House, Nkiruka Onyejeocha, (APC) representing Isuikwuato/Umunneochi Federal Constituency of Abia State.
The resolution of the House followed a motion titled “Urgent Need to Recover Outstanding Debts owed the Federal Government by Oil and Gas Companies in Nigeria,” presented at the plenary by a House member representing Lere Federal Constituency of Kaduna State, Hon. Ahmed Munir (APC, Kaduna).
Moving his motion the lawmaker recalled the report by the Nigeria Extractive Industries Transparency Initiative (NEITI) that 77 Oil and Gas Companies operating in Nigeria were owing the Federal Government over N2.6 trillion.
Munir who maintained that the debts if recovered will go a long way to boost the Country’s economy, lamented why such a huge debt was being overlooked at a critical time when the Country needed funding for its annual budget.
He further submitted that if the debts were 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.
He disclosed 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.”
He said: “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.
“Such a huge debt is being overlooked at a critical time when the country needs funding for its annual budget.
“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.
“Recovery of the debts is critical in this period of dwindling revenues especially as the Covid-19 pandemic has grossly affected the country’s economy.”
Adopting the motion, the House 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 the oil and gas companies.
This is just as the House has also mandated the Committees on Finance, Petroleum Resources (Upstream), Petroleum Resources (Downstream) and Gas Resources to conduct investigation into 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.
This decision followed a motion titled “Need to Ascertain the Total Consolidated Inventory, Assets, Interests and Liabilities of the Nigerian National Petroleum Corporation (NNPC) and its Subsidiaries Before Transfer to the NNPC Limited to Ensure a Glossary Accounting System,” moved by Hon. Ibrahim Isiaka representing Ifo-Ewekoro Federal Constituency at the plenary.
In his motion, the lawmaker while trailing the Corporation’s antecedents, noted that the Nigerian National Petroleum Corporation (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
“NNPC is 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.
“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.
“In line with Section 53 (1) of the Petroleum Industry Act (PIA), the Nigerian National Petroleum Company Limited was registered and incorporated by the Corporate Affairs Commission on September 22nd, 2021 as a Limited Liability Company with an initial capital of N200 Billion, which was regarded as the highest share capital holding in Nigeria.
“Section 53 (3) of the PIA, which vests ownership of the NNPC Limited 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 said.
The lawmaker submitted that Section 88 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) empowers the National Assembly to carry out investigations into matters to which it has powers to make laws.
He stressed that the process was important to boost investors’ confidence and enhance transparency and efficiency in the supply chain management of the newly established NNPC Ltd owing to the outstanding credit sales and the much-needed revenues by the Federal Government to support annual budgets.
Consequently, the lower chamber has given the concerned committees 8 weeks within which to conclude the relevant investigations and report back to the House for further legislative processes.