The Federal Government has initiated a new round of audits concerning the N2.8 trillion fuel subsidy claim made by the Nigerian National Petroleum Company Limited (NNPC).
This move comes after an initial audit by KPMG, which reduced the claims from an initial N6 trillion to N2.7 trillion.
In a recent revelation from the minutes of the Federal Account Allocation Committee meeting held in March 2024, it was disclosed that the government is considering engaging either an external audit firm or directing the Office of the Auditor General of the Federation to verify the claims made by NNPC regarding the amount owed by the government to the oil firm.
NNPC’s Group Chief Executive Officer, Mele Kyari, reiterated the firm’s stance that the federal government still owes them N2.8 trillion in petrol subsidy, despite President Bola Tinubu’s declaration of the subsidy being abolished on May 30, 2023. Kyari emphasized that NNPC has been covering the subsidy bills from its cash flow and awaits reimbursement from the government.
During the FAAC meeting, Minister of Finance and Chairman of the committee, Wale Edun, confirmed Tinubu’s commitment to conducting a forensic audit of NNPC Limited, spanning from 2015 to 2021, aimed at verifying the authenticity of NNPC/Federation Account claims on the N2.7 trillion.
The proposal to prioritize the Office of the Auditor General for the Federation (OAuGF) for the audit was met with mixed reactions. While some, like the Ogun State Commissioner for Finance, Dapo Okubadejo, argued for the engagement of an independent auditor to avoid conflicts of interest, others, including the Federal Commissioner, Revenue Mobilization, Allocation and Fiscal Commission, supported the idea of utilizing OAuGF’s expertise, with the option of engaging an external audit firm if necessary.
Additionally, concerns were raised over the alleged utilization of multiple exchange rates by federal government agencies in converting revenue inflow, with NNPC reportedly applying three different rates.
This practice, as highlighted by the Commissioner of Finance, Delta State, Okenmor Tilije, has led to significant exchange rate differentials, impacting revenue remitted into the Federation Account.
Efforts to obtain comments from NNPC Ltd.’s Chief Corporate Communications Officer, Olufemi Soneye, were unsuccessful as of press time.
As the audit process unfolds, stakeholders anticipate clarity on the subsidy claims and measures to address exchange rate inconsistencies affecting revenue inflow into the Federation Account.
