The Federal government has accumulated a debt of N4.207 trillion to the Nigerian National Petroleum Company Limited, NNPC Ltd, due to months of outstanding petrol subsidy payments.
According to Vanguard, this was disclosed by the NNPC’s spokesperson Olufemi Soneye.
Soneye, the Chief Corporate Communications Officer of NNPC, issued a statement in Abuja revealing that the national oil company is indebted to the Federation in the amount of N2.852 trillion in unremitted revenue. This results in a net balance of N1.355 trillion in favor of NNPC.
Soneye stated that NNPC will maintain its cooperation with the Nigeria Extractive Industries Transparency Initiative and the Reconciliation Committee initiated by President Bola Ahmed Tinubu.
This committee is responsible for examining, evaluating, and reconciling financial records pertaining to the alleged debt owed to the Federation by both NNPC Ltd. and the Federation Accounts Allocation Committee.
He clarified this statement in response to calls from a non-governmental organization to investigate various outstanding sums owed to the Federation by NNPC.
He highlighted that these claims from the NGO lacked merit, especially since NEITI had already refuted many of the allegations in its 2021 report after discussions with NNPC Ltd.
Furthermore, he explained that during President Bola Ahmed Tinubu’s tenure, NNPC was compelled to sell Premium Motor Spirit (petrol) at one-third of its actual value, leading to a monthly subsidy bill averaging N400 billion.
He explained that this significant subsidy burden strained the company’s finances and revenues.
He stated “that subsidy bill accumulated to up to N3.736 trillion as of May 31st, 2023.
“With respect to gas-to-power debts, the non-payment of NNPC Ltd.’s share of upstream joint venture gas supplied to the government-owned plants led to the accumulation of indebtedness of N174.07 billion by the Federation.
“Similarly, the receivables due from the federation to NNPC Exploration & Production Limited, NEPL, as of 31st May 2023 amount to $712 million (equivalent to N309.07 billion at N434.08/US$1) for revenues not remitted to NEPL but paid into the Federation account.
“While the Federation owed NNPC Ltd. the sum of N4.207 trillion as net indebtedness, the Company was only indebted to the Federation in the sum of N2.852 trillion, made up mainly of outstanding Good and Valuable Consideration (GVC) in respect of government upstream divestments, royalties, and Petroleum Profit taxes (PPT).
“We would also like to use this opportunity to clarify that over the years, our relationship with NEITI has been very cordial, as seen in August 2020 when we became an EITI supporting company, joining a group of over 65 extractive companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners committed to observing the EITI supporting company expectations”, he added.
