Issue Description

NNPC deducted first line charge for pipeline repairs and maintenance in 2016 was N126.554 billion.

Out of the total N126.554 billion in 2016 only N4.949 billion accounting for 3.91% directly relate to repairs and maintenance.

Other payments such as ITF contribution, NPA,

PEF, Salaries, Employee pension etc. do not directly relate to pipelines repairs and maintenance.

The inclusion of other non-related expenses into the account of pipeline repairs and maintenance shows lack of transparency and accountability.

Neiti Recommendations

1. A periodic audit by the federal government to verify the utilization of amount deducted for pipeline maintenance and repairs should be undertaken.
2. Government should consider the following options

• Allocating specific crude volume to NNPC to cater for their operational costs

• Consider a specific percentage of their revenue collection to cater for their costs

• Define the ceiling to be expended in defraying their costs.

Status Implementation

1. A periodic audit by the federal government to verify the utilization of amount deducted for pipeline maintenance and repairs should be undertaken.
2. Government should consider the following options

• Allocating specific crude volume to NNPC to cater for their operational costs

• Consider a specific percentage of their revenue collection to cater for their costs

• Define the ceiling to be expended in defraying their costs.