External auditors to probe NNPC’s N2.6 trillion subsidy claim
The Federal Government has finally initiated plans to enlist the services of an external auditor to verify the N2.7 trillion fuel subsidy claim by the Nigerian National Petroleum Company Limited against the government.
The yet-to-be-named auditor will assist the Office of the Auditor-General of the Federation in determining the actual amount owed by the government.
This development comes five months after the plan was proposed at the Federation Allocation Accounts Committee meeting in April 2024.
NNPC claimed an outstanding amount of N6 trillion, but this was reduced to N2.7 trillion after an initial audit conducted by the firm KPMG.
It had been reported that the audit would cover the period from 2015 to 2021.
Although Ali Mohammed, the Director of Home Finance at the Ministry of Finance, has consistently provided updates at every FAAC meeting, the latest development regarding an external auditor indicates that no concrete steps have been taken to audit the claim.
On May 30, 2023, a few hours after President Bola Tinubu’s declaration that “subsidy is gone,” NNPC Group Chief Executive Officer Mele Kyari told State House correspondents that the Federal Government still owed the firm N2.8 trillion for petrol subsidies.
Kyari explained that the NNPC had covered the petrol subsidy bills from its cash flow and stated that the government had so far been unable to repay the N2.8 trillion.
He said, “Since the provision of N6 trillion in 2022 and N3.7 trillion in 2023, we have not received any payment from the Federation.”
He said, “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 N2.8 trillion of NNPC’s cash flow from the subsidy regime, and we can’t continue to sustain this.”
A copy of the minutes from the recent FAAC meeting, obtained by newsmen on Tuesday in Abuja, revealed that the procurement department of the finance ministry has begun the selection process for an external auditor.
The minutes read: “On the forensic audit covering the period 2015 to 2021 to authenticate NNPC/Federation claims in respect of N2.7 trillion withheld by NNPC Limited:
“The Director of Home Finance reported that the Office of the Auditor-General of the Federation was still working on the matter, adding that the Procurement Department of the Ministry had also put structures in place for the engagement of an external auditor who would assist the OAuGF in carrying out the assignment.”
Commenting on the issue, the Chairman of the Commissioners’ Forum/HCF, Ekiti State, suggested extending the period of the audit review to December 2023, considering that the exercise had yet to commence.
Additionally, the Permanent Secretary of Finance, Lydia Jafiya, suggested limiting the scope of the audit to cover the period from 2021 to June 2022, when NNPC was a corporation before transitioning to a Limited Liability Company.
In conclusion, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, appreciated the contributions of members on the issue and expressed optimism that the exercise would be executed swiftly.
Proofreading by Uchechi Ojo, Sub-editor at Neptune Prime.
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