By Ayomide Otitoju
The Office of the Auditor-General of the Federation (OAuGF) has received all necessary documentation to verify the Nigerian National Petroleum Company Limited’s (NNPCL) N2.7 trillion fuel subsidy claim against the Federal Government, The Trust Africa News reports.
This marks a significant step in the forensic audit initiated in April 2024 by the Federal Government to scrutinize subsidy claims for the period 2015 to 2022. The procurement department of the Ministry of Finance has also obtained the terms of reference and scope of work to guide the hiring of an external firm to assist in the process.
Background of the Controversy
The audit follows NNPCL’s announcement in May 2023, shortly after President Bola Tinubu declared an end to the subsidy regime. At the time, NNPCL’s Group Chief Executive Officer, Mele Kyari, revealed that the Federal Government owed the company ₦2.8 trillion for subsidy payments financed from NNPCL’s cash flow.
Kyari stated, “Since the provision of ₦6 trillion in 2022 and ₦3.7 trillion in 2023, we have not received any payment from the Federation. We’re waiting for them to settle up to ₦2.8 trillion.”
Audit Process Update
Minutes from the September 2024 Federal Allocation Accounts Committee (FAAC) meeting provided updates on the audit. Ali Mohammed, Director of Home Finance, reported that the OAuGF had received the required documents and that an external audit firm would support the exercise.
The minutes disclosed, “The Auditor-General for the Federation has committed to diligently conducting the assignment with external audit support, and the Ministry will ensure proper follow-up.”
The topic has been temporarily removed from FAAC discussions until further updates are available.
Concerns About Transparency
Energy experts have raised concerns over NNPCL’s management of subsidy claims and its financial relationship with the government. Professor Wumi Iledare, an energy expert, questioned why such a significant debt was allowed to linger, calling for the audit to include funds collected on behalf of the government.
Similarly, Professor Dayo Ayoade of the University of Lagos noted longstanding transparency issues between the government and NNPCL.
Revenue Refunds and Reconciliation
In related developments, revenue-generating agencies, including NNPCL, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Federal Inland Revenue Service (FIRS), refunded ₦1.19 trillion in arrears to the Federation Account between January and July 2024.
For July alone, $214.32 million (₦289.01 billion) was reconciled and paid to a Central Bank-designated account. However, unresolved payments totaling $273.7 million (₦3.65 trillion) are still under reconciliation.
The FAAC Sub-Committee continues to work with agencies to ensure outstanding amounts are paid promptly, with $180.2 million and ₦2.54 trillion in pre-June 2023 arrears referred to the Stakeholders Alignment Committee.
NNPCL spokesperson Femi Soneye assured that reconciliation efforts with relevant government agencies and auditors are ongoing. “Once the process is completed, the public will be informed appropriately,” he said.
