Fuel Subsidy: Nigerian Govt to Audit NNPCL's N2.7 Trillion Claim with External Auditor

The Nigerian government has announced its decision to engage an external auditor to scrutinize the Nigerian National Petroleum Company Limited’s (NNPCL) fuel subsidy claim amounting to N2.7 trillion.

This move aims to ensure transparency and accuracy in the financial dealings related to fuel subsidies.

According to the minutes from the Federal Allocation Account Committee, 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.

The audit will cover the period from 2015 to 2021. The Director of Home Finance reported that the Office of the Auditor-General is still working on the matter.

"The Procurement Department of the Ministry has also put structures in place for the engagement of an external auditor, who would assist the Office of the Auditor-General of the Federation (OAuGF) to carry out the assignment," the minutes stated.

This initiative follows an initial audit by KPMG, which reduced NNPCL's outstanding claim from N6 trillion to N2.7 trillion.

Despite this reduction, NNPCL has been covering the petrol subsidy costs from its cash flow, with the government owing it N2.8 trillion as of May 30, 2023.

NNPCL Group Chief Executive Officer, Mele Kyari, highlighted the financial strain this has caused, stating, "We are waiting for them to settle up to N2.8tn of NNPC’s cash flow from the subsidy regime and we can’t continue to build this."

The Chairman of Commissioners’ Forum/HCF, Ekiti State, suggested extending the audit review period to December 2023, considering that the exercise has not yet commenced.

This proposal comes four months after the plan was initially proposed at the monthly Federation Allocation Accounts Committee meeting in April 2024.