The Federal Government is ready to embark on a fresh audit of the N2.8tn fuel subsidy claim by the Nigerian National Petroleum Company Limited.
A first audit was carried out by KPMG reducing the claims from N6 trillion to N2.7 trillion, according to The Punch.
The Federal Government is also considering appointing an external auditor or directing the Federation’s Auditor General’s Office to verify the claims made by the NNPCL concerning the amount of the government’s debt to the oil company.
This was revealed in the minutes of the Federal Account Allocation Committee meeting held in March 2024.
On May 30, 2023, just before the inauguration of President Bola Tinubu, the NNPCL Group Chief Executive Officer, Mele Kyari, told State House correspondents that the federal government still owes the firm the sum of N2.8tn spent on petrol subsidy.
Kyari said the government had not been able to pay back the N2.8tn so far, even though the NNPCL had paid the petrol subsidy bills from its cash flow.
He said “Since the provision of the N6tn in 2022, and N3.7tn in 2023, we have not have not received any payment whatsoever 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.”
However, during the FAAC meeting, the Minister of Finance and Chairman of the Committee, Wale Edun, disclosed that Tinubu was committed to ensuring that the forensic audit of NNPC Limited was carried out and the results analysed.
He noted that the audit would span from 2015 to 2021, to verify the authenticity of N2.7tn account claims of NNPC/Federation Account
In addition, Edun proposed that the OAuGF be considered for the fresh audit over any other external audit, considering their expertise in auditing.
The minutes read in part, “The Chairman informed the members of Mr President’s commitment to ensuring that the forensic audit of NNPC Limited was conducted. He, however, proposed that since the Office of the Auditor-General for the Federation had expertise in the areas of auditing, the Office would be considered first before any other external audit firm. He added that where external support would be required, an independent firm could be engaged, accordingly.”
However, the Ogun State Commissioner for Finance, Dapo Okubadejo, kicked against the notion, arguing that engaging an independent auditor would mitigate potential conflicts of interest during the exercise.
At the end of the day, consensus was reached on the priority of the OGFAu, with the condition that an external audit firm should be engaged if it is deemed necessary to provide additional support.
The minute later read in part, “The HCF, Ogun State observed that given the diverse nature and objectives of the proposed audit exercise and to prevent conflict of interest, it would be better to engage an independent auditor to conduct the exercise so that other tiers of government will benefit from that level of independence. The HCF, Niger State supported the position and stressed the need to ensure inclusiveness and objectivity in conducting the exercise. On his part, the HCF, Rivers State observed that the engagement of an independent auditor would not necessarily guarantee the success of the exercise. He, therefore, suggested the need to combine both OAuGF and external firms to ensure the success of the exercise.
“Contributing, the Federal Commissioner, Revenue Mobilization, Allocation and Fiscal Commission/Chairman, Indices and Disbursement observed that the proposed audit was in respect of some outstanding claims which include the N6tn against NNPC Limited that was subsequently reduced to N2.7tn after initial reconciliation. He informed members that KPMG which carried out the earlier audit exercise of NNPC had looked at some of the claims and recommended further audit to resolve them.
“Concluding, the meeting agreed that OAuGF would be considered first and an external audit firm would be engaged when necessary to provide additional support.”
As of press time on Wednesday, the attempt to contact NNPC Ltd.’s Chief Corporate Communications Officer, Olufemi Soneye for comments has proved futile. Calls to his phone line were not answered, and he did not reply to his WhatsApp messages.
