NNPC,NEITI collaborate to investigate debt claims on federation account

Business a.m

The Nigerian National Petroleum Company Limited (NNPC Ltd.)has stated that it will continue to collaborate with the Nigeria Extractive Industries Transparency Initiative (NEITI) and relevant stakeholders in the reconciliation committee set up by President Bola Ahmed Tinubu to investigate and reconcile any financial discrepancies between NNPC Ltd. and the

Federation Accounts Allocation Committee  (FAAC).

NNPC Ltd.’s commitment to transparency and accountability follows calls by a non-governmental organization for an investigation into alleged monies owed to the Nigerian Federation by NNPC Ltd. The allegations have sparked controversy, but NNPC Ltd. has pledged to work with the Reconciliation Committee to ensure full transparency. It dismissed the allegations as baseless, citing the fact that NEITI, which compiled the 2021 report, had already refuted many of the claims following engagement with NNPC Ltd.

The oil company stated that the decision by the previous administration to sell petrol at one-third of its value led to an average monthly subsidy of N400 billion, which had a negative impact on its revenues and finances. It also disclosed that the subsidy bill accumulated up to N3.736 trillion as of May 31st, 2023.

NNPC Ltd. stated that the non-payment of its share of upstream gas supplied to government-owned power plants had led to the accumulation of debts amounting to N174.07 billion by the Nigerian Federation. It also stated that the federation owed NNPC Exploration and

Production Limited (NEPL) $712 million for revenues that were paid into the federation account instead of to NEPL.

NNPC Ltd also noted that it is owed N4.207 trillion by the federation, while its indebtedness to the federation is N2.852 trillion, largely due to outstanding Good and Valuable Consideration (GVC) for government upstream divestments, royalties, and Petroleum Profit taxes (PPT).

“We would also like to use this opportunity to clarify that over the years, our

relationship with NEITI has been very cordial, as seen in August 2020 when we

became an EITI supporting company, joining a group of over 65 extractive

companies, state-owned enterprises (SOEs), commodity traders, financial

institutions and industry partners committed to observing the EITI’s supporting

company expectations,” NNPC stated.

 NNPC Ltd. affirmed that it remains open and transparent to all stakeholders, and that the company is committed to delivering value to Nigerians through the principles of Transparency, Accountability and Performance Excellence (TAPE), the core tenets of its leadership under Mele Kyari.