The Federal Government has provided the Office of the Auditor-General of the Federation (OAuGF) with all necessary documents to verify the Nigerian National Petroleum Company Limited’s (NNPCL) N2.7 trillion fuel subsidy claims. This update follows the procurement of terms of reference and scope of work by the Ministry of Finance to guide the hiring of an external audit firm to support the process.
The forensic audit, which spans the period from 2015 to 2021, is a continuation of efforts initiated in April 2024 to examine subsidy payments previously audited by KPMG. The initial audit reduced NNPCL’s claims from N6 trillion to N2.7 trillion.
During a Federal Accounts Allocation Committee (FAAC) meeting in September 2024, the Director of Home Finance, Ali Mohammed, confirmed that the OAuGF had received all required documents. He added that the ministry would closely monitor the process to ensure a thorough and transparent audit.
On May 30, 2023, shortly after President Bola Tinubu’s declaration that the subsidy era was over, NNPCL’s Group Chief Executive Officer, Mele Kyari, revealed that the federal government owed the company N2.8 trillion in unpaid subsidy reimbursements. Kyari noted that NNPCL had financed the subsidy from its cash flow, stating, “We are waiting for them to settle up to N2.8tn of NNPC’s cash flow from the subsidy regime, and we can’t continue to build this.”
Experts, including energy analyst Prof. Wumi Iledare, have called for the audit to also examine funds collected by NNPCL on behalf of the government to provide a complete picture of the subsidy process.
The FAAC also reported significant progress in reconciling arrears owed to the Federation Account by revenue-generating agencies. Between January and July 2024, N1.19 trillion was refunded as reconciled arrears. For July alone, $214.32 million (equivalent to N289.01 billion) was confirmed as repaid to the Central Bank of Nigeria (CBN).
Despite these repayments, unresolved amounts remain substantial, with $273.7 million and N3.65 trillion still due as of September 2024. The NNPCL, Nigerian Upstream Petroleum Regulatory Commission, and Federal Inland Revenue Service are among the agencies involved in ongoing reconciliation efforts.
NNPCL spokesperson Femi Soneye confirmed that reconciliation efforts are ongoing, involving auditors and relevant government agencies. He assured the public that outcomes would be communicated once the process is completed.
The Federal Government has emphasized the importance of resolving subsidy claims and arrears to restore fiscal balance. The audit findings are expected to provide clarity on the controversial subsidy regime and guide future policy decisions.
