FG auditors review NNPCL’s N2.7tn fuel subsidy claim

• Published On: 03 December 2024 at 20:20

The Office of the Auditor-General of the Federation has received the documents needed to verify the Nigerian National Petroleum Company Limited's N2.7 trillion fuel subsidy claim against the government.

Meanwhile, the finance ministry's procurement department has received the terms of reference and scope of work for hiring an external firm to assist with the verification process.

In April 2024, the Federal Government launched a new audit of the NNPCL's N2.8 trillion fuel subsidy claims.

KPMG's initial audit reduced the claims from N6 trillion to N2.7 trillion.

On May 30, 2023, shortly after President Bola Tinubu declared that the "subsidy is gone," NNPCL's Group CEO, Mele Kyari, informed State House correspondents that the Federal Government still owed the company N2.8 trillion from the petrol subsidy.

Kyari stated that the NNPC had covered the subsidy costs with its own cash flow, but the government had yet to repay the N2.8 trillion.

He stated, "Since the provision of N6 trillion in 2022 and N3.7 trillion in 2023, we have not received any payment from the Federation."

"That means they (the federal government) are unable to pay, and we have continued to fund this subsidy from the NNPC's cash flow. We are waiting for them to settle up to N2.8 trillion in NNPC cash flow from the subsidy regime, and we cannot continue to build."

In the September 2024 Federal Allocation Accounts Committee meeting minutes, Director of Home Finance Ali Mohammed assured that the forensic audit would be carried out carefully.

A section titled "Update on the Forensic Audit Covering the Period 2015 to 2022 to Authenticate NNPC/Federation Claims for N2.7tn Withheld by NNPC Limited" stated that the necessary documents for the audit had been provided.

According to the minutes, "The Director of Home Finance reported that the Office of the Auditor-General for the Federation received the documents requested for the assignment.

"He also reported that the Ministry's Procurement Department had received the Terms of Reference and Scope of Work to guide the hiring process for the External Firm that would assist OAuGF in carrying out the assignment.

"Contributing, the Chairman disclosed that he had discussed the matter with the Federation's Auditor-General, and the OAuGF committed to carrying out the assignment diligently with the support of the External Audit Firm as proposed. He assured that the Ministry will continue to follow up with OAuGF to ensure that the assignment is completed successfully.

The director also suggested that the topic be removed from discussions until new information was provided.

"Based on that, he suggested and the meeting agreed that the matter be temporarily removed from the Matters Arising pending any future update," stated the speaker.

Experts monitoring the situation expressed concerns about the investigation following the departure of former NNPCL CFO Ajiya Umar.

However, NNPCL spokesperson Femi Soneye dismissed these concerns, stating that the process is still ongoing.

"I can confirm that reconciliation is currently underway with the appropriate government agencies and auditors. Soneye stated on Monday that once the process is completed, the public will be appropriately informed.