KEY POINTS

• NNPCL’s N2.7 trillion ($1.69 billion) subsidy claim is under audit verification.
• The Nigerian government still owes NNPCL billions for fuel subsidies.
• Experts demand a more transparent review of the entire subsidy process.

The Office of the Auditor-General of the Federation has officially started verifying the Nigerian National Petroleum Company Limited’s (NNPCL) claim for a refund of N2.7 trillion in fuel subsidy payments.

According to reports, the agency has now received all necessary documents for this process.

The procurement department of the finance ministry is also involved, as they have outlined terms of reference and a scope of work for an external audit firm that will support the verification process.

This audit follows an earlier review in 2024, where KPMG, an audit firm, reduced the initial claim from N6 trillion to N2.7 trillion.

The audit will cover the period from 2015 to 2021, allowing for a thorough investigation into the accuracy of NNPCL’s subsidy claims.

NNPCL’s struggle with fuel subsidy payments and government debt

In May 2023, shortly after President Bola Tinubu’s announcement that the fuel subsidy had ended, Mele Kyari, the Group CEO of NNPCL, revealed that the Nigerian government still owed the company N2.8 trillion in subsidy costs.

Kyari emphasized that although the NNPCL had been covering the subsidy from its own cash flow, the government had not made any payments toward the debt since the subsidies were provided in 2022 and 2023.

According to Punch, the unpaid debt has created significant financial strain for the state-run oil company, and Kyari has called on the government to fulfill its repayment obligations.

Questions surrounding transparency as audit progresses

Despite concerns raised by experts following the departure of former NNPCL Chief Financial Officer Ajiya Umar, the audit process is moving forward.

Femi Soneye, a spokesperson for NNPCL, reassured the public that the reconciliation process is still in progress and that relevant government agencies and auditors are working together to resolve the issue. He emphasized that once the reconciliation is completed, updates would be made public.

The audit is not only focused on the N2.7 trillion refund claim but also on ensuring that the public is informed about the accuracy and transparency of the process.

Experts, including energy professionals such as Professor Wumi Iledare, have questioned why such a large sum has remained unpaid by the government for such an extended period.

They have also called for a broader review, including the amounts collected by NNPCL on behalf of the government.