Emmanuel OchayiThe reports submitted to the National Assembly highlighted unauthorised deductions and discrepancies in fund transfers. Despite repeated requests, the NNPCL allegedly ignored probe invitations and failed to provide justifications for the financial irregularities raised.
14 Financial Infractions Identified
The NNPCL has faced criticism from international organisations for its lack of transparency. The World Bank noted in its December 2023 Nigeria Development Update that the company’s financial dealings, particularly regarding subsidy arrears, are opaque.
Join our WhatsApp ChannelFormer Central Bank Governor Sanusi Lamido also criticised the NNPCL, describing it as the “most opaque oil company in the world.” He accused the company of failing to remit adequate foreign exchange and keeping joint ventures and oil-backed loans hidden from the public.
The Auditor-General’s report detailed 14 financial infractions, including unauthorised deductions worth N1.33 trillion in 2017. The report stated that NNPCL deducted these funds without authorisation, violating Section 162 (1) of the 1999 Constitution, which mandates that all government revenues be paid into the Federation Account.
Breakdown of Infractions Over the Years
In 2019, the Auditor-General uncovered seven major infractions totalling N681.02 billion. It was reported that NNPCL remitted only N519.92 billion out of the N1.27 trillion revenue accrued. The audit revealed discrepancies between the company’s audited accounts and the amount recorded by the Accountant-General.
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The report also noted that 107 million barrels of crude oil were lifted without necessary documentation. The company failed to provide information on crude oil sales and allocations, leading to a loss of crude oil valued at N5.498 billion.
In 2020, the Auditor-General requested the National Assembly’s intervention to recover N151.12 billion unjustifiably deducted by NNPCL. The deductions were purportedly for handling priority projects and covering operational costs, but no evidence of approval was provided.
Significant Deductions in 2021
In 2021, NNPCL generated N484.73 billion from crude oil sales but deducted N343.64 billion as operational costs without providing a breakdown. The report stated that NNPCL only remitted N77.075 billion out of the N127.075 billion payable, leaving an unremited balance of N50 billion.
The Auditor-General also reported a deduction of N82.95 billion from crude oil and gas sales for refinery rehabilitation without evidence of authorisation. Additionally, N3.75 billion was noted as a shortfall from petrol sales, and N83.66 billion in miscellaneous income was diverted to a sinking fund instead of the Federation Account.
Calls for Accountability and Sanctions
The Centre for Anti-Corruption and Open Leadership (CACOL) described the NNPCL as a hub of institutional corruption. CACOL’s Executive Director, Debo Adeniran, expressed frustration over the lack of accountability, despite the enactment of the Petroleum Industry Act aimed at decentralising the company.
Adeniran stated that the NNPCL has always been a source of enrichment for government officials, even before it became a limited liability company. He emphasised that the company’s operations remain shrouded in secrecy, with powerful interests shielding it from scrutiny.
He remarked, “The operations of the NNPCL have always been shrouded in secrecy. Even the Petroleum Industry Act has not helped. Despite all the noise about decentralisation and unbundling of the NNPCL, nothing has materialised.”
International Scrutiny and Local Demands
International organisations and local advocacy groups continue to demand greater transparency and accountability from the NNPCL. The World Bank and others have consistently criticised the company for its opaque financial practices and lack of compliance with regulatory standards.
CACOL and the Civil Society Legislative Advocacy Centre (CISLAC) called for sanctions against NNPCL officials involved in the infractions. They urged the government to take decisive action to ensure that public funds are managed transparently and that those responsible for misappropriations are held accountable.
NNPCL’s Response Awaited
As of now, the NNPCL has not responded to the allegations or provided any justification for the financial irregularities highlighted in the Auditor-General’s reports. The lack of response has fuelled calls for stricter oversight and reforms to prevent future occurrences.
The National Assembly and other relevant authorities are expected to review the findings and take necessary actions to address the issues raised. The public continues to watch closely, awaiting the company’s response and the government’s next steps in ensuring accountability and transparency in the management of Nigeria’s oil resources.
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.
