The Federal Government has commenced an audit of the Nigerian National Petroleum Company Limited's (NNPCL) N2.7 trillion fuel subsidy claim. This development, reported by Elliptical News, follows an initial audit by KPMG which reduced the subsidy claims from N6 trillion to N2.7 trillion.
In this latest audit, the government has approved the involvement of the Office of the Auditor General of the Federation to verify NNPCL's claims regarding the outstanding debt. This was confirmed by Ali Mohammed, Director of Home Finance, during the Federal Account Allocation Committee (FAAC) meeting in April 2024. An update is expected at the May FAAC meeting.
Last month, Elliptical News detailed that the audit, covering 2015 to 2021, aims to verify the authenticity of NNPCL's claims. On May 30, 2023, following President Bola Tinubu's announcement of the end of fuel subsidies, NNPCL's CEO Mele Kyari revealed that the government owes the company N2.8 trillion for past subsidy payments. Kyari noted that NNPCL has been covering these costs from its own cash flow due to the government's inability to pay.
Meeting minutes obtained by Elliptical News indicate that the government has started auditing the N2.6 trillion subsidy claim. The audit aims to authenticate NNPCL's claims from 2015 to 2021.
Additionally, the FAAC committee has expressed concerns over NNPCL's refusal to comply with the revised exchange rate of N693.50/$1 for converting federation revenue. The committee warned that failure to adhere to this rate might result in actions to recover federation funds.
The minutes also revealed that NNPCL's non-compliance with the new exchange rates set by the Central Bank of Nigeria could result in a substantial refund to the Federation Account. The sub-committee noted significant discrepancies in exchange rate calculations and urged NNPCL to provide official authorization for its exchange rate use.
FAAC hopes to resolve these issues with NNPCL amicably but insists on adherence to legally backed exchange rates.
