- Tinubu urged to probe activities of national oil company under Buhari
- It’s false, NNPCL denies alleged inflated fuel subsidy payments
- Says it conducts its businesses with international best practices
A contentious forensic audit conducted by KPMG, a global accounting firm, has reportedly uncovered a significant discrepancy in the fuel subsidy claims made by the Nigerian National Petroleum Company Limited.
The audit allegedly revealed that NNPCL inflated its fuel subsidy claims by a staggering N3.3 trillion, according to a report done by iWitnessLive.
Initially, NNPCL reported spending N6 trillion on fuel subsidies, with the government of former President Muhammadu Buhari paying a substantial portion.
However, NNPCL’s Group CEO, Mele Kyari, claimed that the company still owed N2.8 trillion.
Just hours after President Bola Tinubu’s announcement that fuel subsidy had been eliminated, Kyari stated that the Federal Government still owed NNPCL N2.8 trillion for petrol subsidy payments, which the company had covered from its cash flow.
The government has yet to reimburse NNPCL for this amount, the KPMG May 2024 report said.
“Since the provision of the N6trn in 2022, and N3.7trn 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 N2.8trn of NNPC’s cash flow from the subsidy regime and we can’t continue to build this,” Kyari had said.
Meanwhile, the Federal Government plans to conduct a fresh audit of the N2.8 trillion fuel subsidy claim made by NNPC Limited, following reconciliation by KPMG that reduced the claims to N2.7 trillion.
The audit, which will cover 2015-2021, aims to verify the authenticity of NNPC’s claims. The Office of the Auditor-General for the Federation (OAuGF) will lead the audit, with the option to engage an external firm for additional support.
The decision was reportedly made during a Federal Account Allocation Committee meeting in March 2024, where members discussed the need for an independent audit to prevent conflicts of interest.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, had emphasized President Tinubu’s commitment to the forensic audit, while commissioners from various states shared their perspectives on the matter.
According to the minutes, the Ogun State Commissioner for Finance suggested engaging an independent auditor to ensure a conflict-free exercise, benefiting all tiers of government.
The Niger State Finance Commissioner reportedly supported this stance, emphasizing inclusiveness and objectivity.
Rivers State, however, noted that an independent auditor doesn’t guarantee success, recommending a combined approach with OAuGF and external firms.
The Federal Commissioner, Revenue Mobilization, Allocation and Fiscal Commission/Chairman, Indices and Disbursement had explained that the audit aims to resolve outstanding claims, including the reduced N2.7trn claim against NNPC Limited.
KPMG’s initial audit recommended further investigation. The meeting concluded that OAuGF will lead the audit, with external support as needed.
“Contributing, the Federal Commissioner, Revenue Mobilization, Allocation and Fiscal Commission/Chairman, Indices and Disbursement observed that the proposed audit was in respect of some outstanding claims which include the N6trn against NNPC Limited that was subsequently reduced to N2.7trn after initial reconciliation. He informed members that KPMG, which carried out the earlier audit exercise of NNPC, had looked at some of the claims and recommended further audits to resolve them.
“Concluding, the meeting agreed that OAuGF would be considered first and an external audit firm would be engaged when necessary to provide additional support,” the minutes reportedly read in part.
It’s false, NNPCL denies alleged inflated fuel subsidy payments
However, the NNPCL has refuted media reports alleging that it inflated the fuel subsidy payments by N3.3 trillion.
In a statement on Monday by its Chief Corporate Communications Officer, Olufemi Soneye, the NNPC said it has never inflated its subsidy claims with the Federal Government.
The national oil company said all its previous subsidy claims are verifiable, saying that all relevant records and documents have been sent to relevant authorities and agencies for audit.
The statement reads, “The Nigerian National Petroleum Company Limited (NNPC Ltd.) notes with dismay a report in a section of the media alleging that it inflated subsidy claims by N3.3 trillion, and wishes to state that it conducts its businesses accountably and transparently in keeping with international best practices and has, at no time, inflated its subsidy claims with the Federal Government.
“All previous subsidy claims by the Company are verifiable, as relevant records and documents have been sent to relevant authorities and agencies. NNPC Ltd. is neither aware of any audit of its subsidy claims nor the probe ensuing therefrom and wishes to state categorically that both ridiculous claims are products of the febrile imagination of the reporters and their respective media houses.”
The oil company vowed to resist any attempt to drag it into the politics of fuel subsidy, saying that it operates on a commercial basis and in line with the Petroleum Industry Act.
NNPCL, therefore, appealed to journalists and media houses to exercise restraint and verify any information before publication.
It added, “NNPC Ltd. will resist any attempt to drag the Company into the apparent politics of fuel subsidy as it currently operates on a commercial basis and the express provisions of the Petroleum Industry Act (PIA).
“It is on record that, in line with its Transparency, Accountability & Performance Excellence (TAPE) mantra, NNPC Ltd. has, on several occasions, independently invited external auditors to review its books.
“NNPC Ltd. calls on media practitioners and media houses to exercise restraint and verify information before publication in keeping with the ethics of the noble profession of journalism to avoid misleading the public.”
