The Federal Government is gearing up for a comprehensive audit of the N2.8 trillion fuel subsidy claim by the Nigerian National Petroleum Company Limited (NNPCL). This initiative comes after an initial audit conducted by KPMG reduced the claims from N6 trillion to N2.7 trillion.
According to minutes obtained from the Federal Account Allocation Committee meeting held in March 2024, the government is contemplating engaging either an external audit firm or directing the Office of the Auditor General of the Federation to verify the claims made by the corporation regarding the amount owed by the government to the oil firm.
The decision stems from a declaration made by President Bola Tinubu on May 30, 2023, regarding the removal of subsidies. Mele Kyari, the Group Chief Executive Officer of NNPCL, informed State House correspondents that despite this declaration, the federal government still owes the firm N2.8 trillion spent on petrol subsidies. Kyari emphasized that the NNPC had been funding the subsidy bills from its cash flow since then, as no payments have been received from the Federation.
Minister of Finance and Chairman of the committee, Wale Edun, provided an update during the FAAC meeting, stating Tinubu’s commitment to conducting a forensic audit of NNPC Limited and analyzing the results. The proposed audit would cover the period from 2015 to 2021, aiming to authenticate NNPC/Federation Account claims regarding the N2.7 trillion.
Edun proposed considering the Office of the Auditor-General for the Federation (OAuGF) for the audit due to their expertise in auditing. However, this suggestion was met with dissent from the Ogun State Commissioner for Finance, Dapo Okubadejo, who argued for engaging an independent auditor to mitigate potential conflicts of interest.
Ultimately, a consensus was reached to prioritize the OAuGF for the audit, with the option to engage an external audit firm for additional support when necessary.
Meanwhile, concerns were raised by the Commissioner of Finance, Delta State, Okenmor Tilije, regarding the alleged utilization of multiple exchange rates by federal government agencies in revenue conversion. Tilije highlighted NNPC Limited’s application of three different rates, leading to an exchange rate differential of about N2.83 trillion between August 2023 and February 2024. He emphasized the need for a single exchange rate applicable across the board to ensure transparency and uniformity in revenue remittance into the Federation Account.
