The federal government has commenced the scheduled audit of the N2.7 trillion gasoline subsidy claim made by the Nigerian National Petroleum Company Limited.
KPMG, an audit firm, conducted an initial audit, which reduced the claims from N6 trillion to N2.7 trillion, according to The Punch.
However, in the current audit, the government stated that it had endorsed the engagement of the Office of the Auditor General of the Federation to examine the corporation’s allegations about the amount the government owes the oil firm.
This process was confirmed by the Director of Home Finance, Ali Mohammed at the April 2024 Federal Account Allocation Committee meeting.
The government stated that an update on the issue would be presented during the May FAAC meeting.
It was reported last month that the audit will extend from 2015 to 2021, aimed at verifying the authenticity of NNPC/Federation Account claims on the N2.7 trillion, while it was considering employing an external audit company.
President Bola Tinubu had on May 30, 2023, declared “subsidy is gone” thereby putting an end to the controversial fuel subsidy.
Also, the NNPCL Group CEO Mele Kyari told State House correspondents that the federal government still owed the corporation N2.8 trillion in petrol subsidies.
The minute read in part, “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, Home Finance informed members that the process of the forensic audit of NNPC Limited as reported at the last meeting was in progress. He assured that an update would be provided on the matter at the next meeting.”
Members of the committee also bemoaned the refusal of the NNPCL to comply with the revised exchange rate of N693.50/$1 in converting federation revenue.
According to them, NNPCL has rejected to comply with the CBN’s instructions to revise the May 2023 Central Bank of Nigeria currency rate from N436.38/$1 to N621.86/$1, and then to N693.50/$1.
The minute further read, “At the last meeting of FAAC, it was reported that there was a review of the May 2023 CBN Exchange rate from N436.38/$1 to N621.86/$1 and a further review to N693.50/$1 in line with the directive of CBN. NNPCL was directed to comply with the revised exchange rate of N693.50/$1 and re-compute all the Royalties, Taxes and other revenue items for May 2023 and revert.”
The official informed the meeting that at the April 2024 meeting of the sub-committee, NNPCL complained that the proposed review would result in a refund of N16,829,747,742.96 to the Federation Account by the company.
He concluded that the subcommittee expected the Federation Account to be reimbursed the exchange rate, but NNPCL utilized it to cover the subsidy claim. He urged that the FAAC decide on the case.
He noted that the Sub-committee only recognized exchange rates that were legally supported and that NNPCL was required to seek authorization for the use of weighted average exchange rates on PMS dollar payments. He revealed that NNPCL responded by requesting that the Sub-committee write the company officially to release the NEC approval on the matter.000
