NNPC’s N2.8 Trillion Non-Remittance Revealed in NEITI Report
The latest report from the Nigeria Extractive Industries Transparency Initiative (NEITI) has exposed that the defunct Nigeria National Petroleum Corporation (NNPC) withheld the remittance of N2.8 trillion to the Federal Government during the year 2021.
This revelation follows NEITI’s disclosure in its 2021 oil and gas report, where it unveiled that the NNPC had failed to remit $1.9 billion (equivalent to N2.8 trillion) to the Federation Account Allocation Committee (FAAC) before its transition into a commercial entity.
NNPC’s Transition and FAAC Debt Claims:
It is essential to note that the national oil company, NNPC, transitioned into NNPC Limited on July 19, 2022, marking its transformation into a commercial entity, regulated by the Companies and Allied Matters Act (CAMA).
In response to NEITI’s claims of under-remittance to FAAC, sources within the presidency have confirmed that the Federal Government also carries a substantial debt to NNPC Limited, amounting to N4.1 trillion ($9.74 billion).
This debt stems from fuel subsidy expenses incurred by NNPC Limited.
End of Fuel Subsidy and Subsequent Financial Impact:
President Bola Tinubu initiated the discontinuation of the fuel subsidy regime on May 29, citing its unsustainability for the government.
Before the subsidy’s removal, NNPC Limited, as the exclusive importer of petrol in the country, incurred monthly expenses of approximately N400 billion on behalf of the federation.
This expenditure was facilitated through an arrangement known as “under-recovery” or subsidy.
Between January 2023 and May 2023, the total under-recovery for petrol escalated to N1.828 trillion, marking a 55 percent increase compared to the N1.27 trillion paid during the corresponding period in 2022.
NNPC’s Claim and Presidential Action:
Presidential sources have disclosed that FAAC, through several letters, had urged the payment of the alleged N2.8 trillion owed by NNPC to the federation accounts for the year 2021.
However, NNPC Limited has resisted these demands while simultaneously asserting that the federal government is indebted to it in the amount of N4.1 trillion as subsidy debt.
In response to these conflicting claims, an inter-agency committee has been established by President Tinubu to investigate and reconcile the matter.
The committee’s preliminary report has already been submitted to the President.
Resolution Efforts Continue:
In an attempt to address the ongoing dispute between NNPC Limited and FAAC, President Tinubu’s inter-agency committee is actively working to find a resolution.
The investigation aims to shed light on the conflicting financial claims and ensure transparency in the handling of these significant financial matters.
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