The joint sitting of the House Committee of the House of Representatives Committee on Finance and the Committee on National Planning has directed the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) to provide all details of oil production, crude sales, and other activities in the Upstream Petroleum Industry in the country to the joint committees.
The directive was given after a presentation by the NUPRC Executive Commissioner of Economic Regulation & Strategic Planning (ECR&SP), Mr Babajide Oluwole Fasina, who represented the Chief Executive Officer (CEO) of the organisation, Gbenga Olu Komolafe, accompanied by some members of its management at the ongoing interactive session with key agencies on the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
Mr. Fasina informed the Committee that NUPRC derives its various revenues from oil royalty, gas royalty, concession rental, gas flat penalty, and miscellaneous oil revenues, which include fines and levies, signature bonuses, and renewal of licenses.
Giving a highlight of the revenue collections, he said that NUPRC gets 4% Cost Of Revenue Collection (CORC) for the total revenue collected on behalf of the federal government, which he said was credited directly to the Federation Account, and FAAC credits the 4% to the Commission.
“The cost of revenue collection amounted to N114.84 billion in 2023 as against N114.38 billion in 2022. The amount released in 2023 includes N2.82 billion for capital expenditure, though N173.77 billion was due as 4% of the actual collections of N14.34 trillion in 2023.
“The Commission also generates revenues internally, such as registration fees, registration Fees, Licence Fees, Fines, Recoveries, etc. It generated N1.44 billion in 2023 compared to N30.08 billion in 2022, and this accounts for 1.26% of the total Revenue realized in 2023 and 2.62% in 2022, respectively,” Mr Fasina said.
He, however, informed the committees that the commission recorded a high expenditure in 2023 compared to 2022 of N11.46 billion, which he said was an increase of 10.83%.
“Personnel cost, which has the largest share, amounting to N82.35 billion, represents 70.19% of the total expenses of N117.33 billion, followed by overhead costs of N31.63 billion, which accounts for 26.96 billion,” he added.
The NUPRC Executive Commissioner, however, informed that the Commission’s non-tax remittance dropped from N3.67 billion in 2022 to N1.77 billion in 2023 and an amortisation and depreciation of N246.66 million and N1.33 billion, respectively.
The Chairman of the Committee on Finance, Mr James Abiodun Faleke, who presided over the session, and members were displeased by the Commission’s personnel and overhead expenditure as stated by its official as contained in the documents presented before the Committee.
“I’m wondering what type of organisation you have. You are paying 88 billion as salaries. How many staff do you have? How many staff do you have? The National Assembly, before the review, gave us 150 billion in the year. All, including management. Everybody.Senate, House of Reps, management, everybody.
“So if only your agency is spending 88 billion. That’s why you have so much. So much money.Because of 4% collection. 4% is too much. We need money… You are spending 88 billion on personnel, and you are spending 40-something billion on overhead,” Faleke said.
The committee rejected the NUPRC’s explanation and demanded a comprehensive record from the Commission as regards its revenues, expenditures and all other activities including exploration activities of Frontier Explorations at various Frontier Basins in the country where oil prospecting activities are taking place.
In his ruling, the Chairman of the Committee, James Faleke said, “You are going to come back with all the records of all the wells that produce the oil litre by litre per day. How much oil do we get from here every day?
“You are going to come back with records of shipments of crude either daily or weekly at what rate. You are going to come back with proposals for 2025 as to the expectations of two million five barrels per day, 2.06 million per day.
“And you reach out to the Frontier or whatever you called them. You come together with them and must come up with the records of all Frontier activities, expenses incurred, crude oil realized from there and of course the sales proceeds and add what the Frontiers are doing. The day they started and how far they have gone. You must come here with them on the 18th. We expect you here on the 18th by 11 am.”
Similarly, the Committee also directed the Nigeria Bulk Electricity Trading (NBET) PLC to provide more specific details on its budget performance and other activities in the electricity market.
The agency has, in its submission of the documents it presented informed the Committee about the ‘reason for the disparity between Generation Companies (Gencos) invoices and the amount of invoices to Distribution Companies (DisCos).
The agency’s documents stated, “NBET invoices DisCos before receiving and verifying GenCo invoices as required by the settlement calendar.” This timing difference means that components such as interest and True-Up, which are included in GenCo invoices cannot be reflected in the invoices sent to DisCos, Consequently, the mismatch in timing leads to discrepancies in the amounts of invoices.
“Apart from the DisCos, other off-takers such as Ajaokuta Steel Company and Net Importer Generation Companies are included in the invoicing process. The inclusion of these off-takers introduces further complexities that contribute to the disparity between actual invoices and the amounts of invoices to DisCos.
“The supplementary order under the Transitional Electricity Market (TEM) framework mandates the use of specific tariffs for invoicing net importer GenCos. These tariff requirements create additional differences between the amounts of invoices to GenCos and those passed on to DisCos.”
Other details about budget performance as well as the operations of the electricity market were also presented by NBET in the documents presented.
However, the committee, after the presentation requested more specific documents containing more details.
It directed the agency’s officials to go back, tidy up, and present the requested documents.
In the same vein, the Committee directed its Clerk to write to the Pension Transitional Arrangement Directorate (PTAD) with the details of what is required by the Committee from the agency.
The directive was given by the committee after its Executive Secretary, Tolulope Odunaiya alongside its Director of finance and Accounts, Abubakar Sadiq, and the director of corporate services, Sani Mustapha, appeared at the interactive session.
The PTAD was directed to appear on December 18th with the required documents, and a letter will be sent to the organisation by the clerk as directed.
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