An audit has uncovered that the Nigerian National Petroleum Company Limited (NNPCL) inflated its fuel subsidy claims by N3.3 trillion, as reported by iWitnessLive. This revelation comes on the heels of President Bola Tinubu’s announcement that fuel subsidies had been eliminated.
Despite the subsidy removal, NNPCL’s Group CEO, Mele Kyari, asserted that the federal government still owed the company N2.8 trillion for petrol subsidy payments covered by NNPCL’s cash flow. Kyari highlighted that NNPCL had yet to receive any reimbursement from the government since the provision of N6 trillion in 2022 and N3.7 trillion in 2023.
“Since the provision of the N6 trillion in 2022, and N3.7 trillion in 2023, we have not received any payment whatsoever from the Federation. That means they (the Federal Government) are unable to pay, and we’ve continued to support this subsidy from the cash flow of the NNPC. We are waiting for them to settle up to N2.8 trillion of NNPC’s cash flow from the subsidy regime, and we can’t continue to build this,” Kyari stated.
In response, the Nigerian government plans to launch a fresh audit of NNPCL’s N2.8 trillion fuel subsidy claim. A reconciliation by KPMG had previously reduced these claims to N2.7 trillion. The upcoming audit, spanning 2015-2021, aims to verify the authenticity of NNPCL’s claims and will be led by the Office of the Auditor-General for the Federation (OAuGF). An external firm may be engaged for additional support.
The decision for this comprehensive audit was made during a Federal Account Allocation Committee (FAAC) meeting in March 2024. Members discussed the necessity of an independent audit to avoid conflicts of interest. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, underscored President Tinubu’s dedication to the forensic audit. Commissioners from various states also provided their input.
The Ogun State Commissioner for Finance recommended hiring an independent auditor to ensure a conflict-free audit, beneficial for all tiers of government. The Niger State finance commissioner supported this recommendation, emphasizing the need for inclusiveness and objectivity. Conversely, the Rivers State representative pointed out that an independent auditor alone might not guarantee success and suggested a combined approach with both OAuGF and external firms.
The Federal Commissioner, Revenue Mobilization, Allocation and Fiscal Commission/Chairman, Indices and Disbursement, explained that the audit’s goal is to resolve outstanding claims, including the adjusted N2.7 trillion claim against NNPC Limited. KPMG’s initial audit had already recommended further investigation into some of the claims. The FAAC meeting concluded with an agreement that OAuGF would lead the audit, with external support provided as necessary.
The minutes from the meeting detailed that the proposed audit aims to address unresolved claims, particularly the substantial amounts previously cited by NNPCL and subsequently adjusted through initial reconciliation.