Emmanuel OchayiThe Nigerian National Petroleum Company Limited (NNPCL) is under scrutiny once again as the Federal Government gears up for an audit of the N2.8 trillion fuel subsidy claims.
This move comes in the wake of previous audits that slashed initial claims from N6 trillion to N2.7 trillion.
Join our WhatsApp ChannelDuring the Federal Account Allocation Committee meeting held in March 2024, it was disclosed that the government is contemplating engaging an external audit firm or directing the Office of the Auditor General of the Federation (OAuGF) to verify the claims made by the NNPCL regarding the amount owed by the government to the oil firm.
Speaking on the matter, Minister of Finance and Chairman of the committee, Wale Edun, emphasized President Bola Tinubu’s commitment to ensuring a thorough forensic audit of NNPCL Limited. The proposed audit is slated to cover the period from 2015 to 2021, aiming to authenticate NNPC/Federation Account claims on the N2.7 trillion.
The minutes read in part, “The Chairman informed the members of Mr President’s commitment to ensuring that the forensic audit of NNPC Limited was conducted. He, however, proposed that since the Office of the Auditor-General for the Federation had expertise in the areas of auditing, the Office would be considered first before any other external audit firm. He added that where external support would be required, an independent firm could be engaged, accordingly.”
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Edun proposed prioritizing the OAuGF for the fuel subsidy audit due to its expertise in auditing. However, this suggestion faced opposition from some quarters. Ogun State Commissioner for Finance, Dapo Okubadejo, argued that engaging an independent auditor would help mitigate potential conflicts of interest during the exercise.
Delta State Commissioner of Finance, Okenmor Tilije, raised concerns over the alleged utilization of multiple exchange rates by federal government agencies in revenue conversion. According to Tilije, NNPC Limited applied three different rates to convert revenue earnings from oil, resulting in an exchange rate differential of about N2.83 trillion between August 2023 and February 2024.
The minute read, “The HCF, Delta State raised concerns over the multiple exchange rate being applied by the agencies to convert the revenue inflow due to the Federation. He pointed out that NNPC Limited applied three different rates to convert the revenue earnings from oil. He observed that the sum of N2.83tn was the Exchange Rate Differentials from August 2023 to February 2024 and stressed the need to put in place a single exchange rate that would be applicable across the board.
The decision to prioritize OAuGF for the audit, with the provision to engage an external audit firm when necessary, was eventually reached after thorough deliberations during the FAAC meeting.
NNPCL Group Chief Executive Officer, Mele Kyari, reiterated the firm’s stance, emphasizing that the government still owes N2.8 trillion spent on petrol subsidy. Despite previous allocations of N6 trillion in 2022 and N3.7 trillion in 2023, NNPC Limited has not received any payment from the Federation, compelling them to cover subsidy bills from their cash flow.
Efforts to obtain comments from NNPC Ltd.’s Chief Corporate Communications Officer, Olufemi Soneye, proved unsuccessful at the time of reporting.
As the audit process looms, stakeholders await further developments to ascertain the accuracy of fuel subsidy claims and ensure transparency in financial transactions within the petroleum sector.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
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