The Federal Government has initiated the process of hiring an external auditor to verify the N2.7 trillion fuel subsidy claim made by the Nigerian National Petroleum Company Limited.
This move, aimed at determining the actual amount owed by the government, follows a proposal made five months ago during the April 2024 Federation Allocation Accounts Committee meeting, according to The Punch.
The selected auditor, yet to be named, will work alongside the Office of the Auditor-General of the Federation.
Initially, the NNPC claimed an outstanding subsidy of N6 trillion, but this figure was reduced to N2.7 trillion after an initial audit conducted by KPMG. The upcoming audit is expected to cover the period from 2015 to 2021.
Although, the Director of Home Finance at the Ministry of Finance, Ali Mohammed provided regular updates at FAAC meetings, this latest development marks the first concrete step towards auditing the claims.
On May 30, 2023, a few hours after the “subsidy is gone” declaration by President Bola Tinubu, the NNPC Group Chief Executive Officer, Mele Kyari, told State House correspondents that the Federal Government still owed the firm the sum of N2.8tn spent on petrol subsidy.
Kyari stated that the national oil company has been covering the fuel subsidy costs from its cash flow, with the government yet to repay the N2.8 trillion owed.
He said, “Since the provision of the N6tn in 2022 and N3.7tn in 2023, we have not received any payment from the Federation.
“That means they (the Federal Government) are unable to pay and we’ve continued to support this subsidy from the cash flow of the NNPC. 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.”
A copy of the minutes of the recent FAAC meeting obtained by our correspondent on Tuesday in Abuja revealed that a selection process for an external auditor by the procurement department of the finance ministry has begun.
The minute read, “On the forensic audit covering the period 2015 to 2021 to Authenticate NNPC/Federation Claims in Respect of N2.7tn withheld by NNPC Limited:
“The Director of Home Finance reported that the Office of the Auditor-General of the Federation was still working on the matter, adding that the Procurement Department of the Ministry had also put structures in place for the engagement of an external auditor, who would assist OAuGF to carry out the assignment.”
Speaking, the Chairman of Commissioners’ Forum/HCF, Ekiti State recommended extending the audit review period to December 2023.
The Permanent Secretary of Finance, Lydia Jafiya suggested limiting the audit to cover the period from 2021 to June 2022, during which NNPC operated as a corporation before transitioning to a Limited Liability Company.
In his concluding remarks, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, acknowledged the contributions from various members and expressed optimism that the audit exercise would be conducted efficiently and promptly.
