The Department of Petroleum Resources (DPR) on Tuesday told the House of Representatives ad hoc committee investigating alleged N6 trillion revenue leakages in the oil and gas sector that the Central Bank of Nigeria (CBN) determines the rate at which royalties paid in dollars were converted to naira before remitting into the federation account.
The investigation covers the period from January 2016 to January 2017.
Speaking through its Head of Planning, Folasade Odunuga, DPR also urged the panel to find out from the Nigerian National Petroleum Corporation (NNPC) why its subsidiary, the National Petroleum Development Company (NPDC), had refused to pay royalties on its crude production activities.
She said the “NPDC remains the worst debtor in the oil and gas industry”.
The DPR officials made the revelations on Tuesday during an interface with the ad hoc committee led by Jarigbe Agom Jarigbe (PDP, Cross River) which sought clarification on the disparities observed in the receipts of remittances submitted by IOCs as issued by the DPR.
According to some of the receipts made available to the panel, the remitted amount (in naira) into the federation account fell short of its dollar value, using current exchange rate.
This caused the lawmakers to ask questions as to why that could have been under the supervision of the DPR.
It was observed that the CBN had been converting dollar remittances, using about N167 to $1 instead of the current N305 to $1.
But Odunuga told the committee that “royalties on crude oil were paid strictly in dollars directly into the federation account in JP Morgan, managed by the CBN.”
She explained that there were other royalties that came in both naira and dollars, adding that payment invoice was based on what currency it was paid in.
The members probed further on the invoices showing DPR converting dollars into naira before remitting to government accounts, but the DPR officials denied this, saying that such was never done since the department doesn’t handle cash directly.
