Despite the claims by the Office of the Auditor General for the Federation and the Socio-Economic Rights and Accountability Project that the defunct Nigeria National Petroleum Corporation did not remit $2.04bn and N164bn into the Federation Account in 2020 before transitioning into a commercial venture, the federal government was more indebted to the national oil company with about N4.1trn ($9.74bn) for subsidy payment, THE WHISTLER can report.
SERAP had in a letter dated February 17, 2024, and signed by its Deputy Director, Kolawole Oluwadare, urged Mr Mele Kolo Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited to “promptly account for and explain the whereabouts of the alleged missing $2.04bn and N164bn in oil revenues.”
SERAP had urged Kyari “to name and shame those responsible for the disappeared oil money, surcharge them for the full amount involved, and hand them over to appropriate anticorruption agencies, as provided for under paragraph 3112(ii) of the Financial Regulations 2009, and recommended by the Auditor-General.”
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The corporation had transitioned into NNPC Limited on July 19, 2022, to operate as a commercial entity under the regulation of the Companies and Allied Matters Act (CAMA).
The move ended its dependence on federal government’s funding formits commercial operations.
President Bola Tinubu had on May 29 removed the subsidy on petrol following the inability of the federal government to carry the huge payment burden.
But before the removal of petrol subsidy, the NNPCL has been the sole importer of petrol into the country spending about N400bn monthly on behalf of the federation through an arrangement known as under-recovery.
Subsidy or under-recovery is the shortfall for the underpriced sales of premium motor spirit, better known as petrol.
From January 2023 to May 2023, petrol under-recovery totalled N1.828trn which is 55 percent higher than the N1.27trn paid in the corresponding period of 2022.
Sources told THE WHISTLER on Sunday that although NNPC Limited received several letters from FAAC requesting payment of the N2.8trn that NNPC is allegedly owing the federation accounts, the Company had said it could not pay any money to FAAC pending the reconciliation of the N4.1trn debt the federal government was owing it.
“We agree that we owe the federal government N2.8trn, but the federation osthe NNPCL N4.1trn for fuel subsidy and power debts.
So, we can’t pay our debtor who owe us more than what we owe them,” one of the sources said.
The source added that the subsidy cost was far higher than the amount that the federation can carry, thus making the NNPCL shoulder the burden all alone since there was no cash backing from the federal government.
The source added, “We used to shoulder the subsidy cost while the federation was budgeting for it without cash backing. The federation oil and gas entitlements were less than the subsidy burden and hence insufficient for us to offset.”
Already, it was learnt that President Bola Tinubu had set up an inter-agency committee to resolve the lingering row between the NNPC Limited and FAAC in the last couple of years.
One of the Presidency sources that spoke to THE WHISTLER, said that vested interests had told the president things that were not entirely factual, prompting the national oil company to write that the matter should be resolve once and for all.
“So many things have been told to Mr. President since assuming office by some vested interests that NNPC Limited has refused to pay into the federation accounts.
“And because we want the general public to know the truth, NNPC Limited management wrote the President to investigate the matter and Mr President graciously approved that an inter-agency committee be set up to investigate and reconcile the matter,” the source stated.
FAAC had on several ocassion accused the NNPC Limited of short-changing it by refusing to pay N2.8trn to the federation account from crude sales, royalties and taxes while the NNPC Limited on the other hand had said that the Federal Government was owing it over N4.1trn in subsidy payment, power debt and other sundry charges.
The committee, which began sitting in June last year at the Ministry of Finance was mandated to reconcile the controversies surrounding the N4.1trn debt the Federal Government is owing NNPC Limited and the N2.8trn that the NNPC Limited is said to have failed to remit to the federation account.
Besides, the ministry of finance and NNPC Limited, other members of the debt reconciliation committee include the Nigerian Upstream Regulatory Commission (NUPRC), Federal Inland Revenue Service (FIRS), Office of the Accountant General of the Federation (OAGF) and FAAC Post-Mortem Sub-Committee.
The establishment of the committee by the president followed a memo dated June 13, 2023, written by the Group Chief Executive Officer (GECO) NNPC Mallam Mele Kyari appealing to him to intervene in the matter.
The letter stated that this was with a view to putting to rest all the allegations and counter allegations by both FAAC and NNPC Limited on the status of the debts and remittances.
THE WHISTLER understands that a preliminary report has been submitted by the committee to the President.