The administration under President Bola Ahmed has initiated an extensive review of the Nigerian National Petroleum Company Limited’s (NNPCL) fuel subsidy claims, totaling N2.7 trillion.
This audit follows a prior assessment by KPMG, which had already reduced the claims from N6 trillion to N2.7 trillion.
Currently, the Office of the Auditor General of the Federation is conducting the audit to verify the legitimacy of NNPCL’s claims, as sanctioned by the government.
Ali Mohammed, Director of Home Finance, confirmed this process during the April 2024 Federal Account Allocation Committee (FAAC) meeting, with further updates expected in the May session.
He noted that the audit spans from 2015 to 2021, aiming to ensure the claims made by NNPCL are accurate.
On May 30, 2023, Mele Kyari, the Group Chief Executive Officer of NNPCL, disclosed that the federal government owes the company N2.8 trillion for fuel subsidies, which NNPCL had been financing from its own resources due to the government’s delayed repayments.
This announcement came shortly after President Bola Tinubu declared the fuel subsidy unsustainable.
Minutes from the FAAC meeting indicate that the audit is progressing, with additional updates forthcoming.
Committee members have raised concerns over NNPCL’s failure to adhere to the Central Bank of Nigeria’s (CBN) revised exchange rate of N693.50/$1 for converting federation revenue.
The committee cautioned that if NNPCL continues to disregard the revised rate without proper authorization, steps will be taken to reclaim the funds due to the Federation Account.
The revised exchange rate has significant financial implications, necessitating that NNPCL refund N16.83 billion to the Federation Account due to the change.
The sub-committee highlighted a discrepancy of roughly N938 billion for the period from June to December 2023, in contrast to NNPCL’s claim of N1.68 trillion.
FAAC stressed the importance of NNPCL obtaining authorization for using a weighted average exchange rate on PMS dollar payments and suggested that if a resolution is not achieved by the following month, NNPCL should reimburse the disputed amount.