The ongoing dispute surrounding alleged indebtedness, the Nigerian National Petroleum Company Limited (NNPC) has announced its commitment to collaborating with stakeholders, notably the Nigeria Extractive Industries Transparency Initiative (NEITI).
The partnership aims to reevaluate and reconcile the financial records concerning over N2 trillion in revenues generated from crude sales, royalties, and taxes that FAAC claims NNPC has not remitted to the federation account.
Conversely, NNPC argues that the Federal Government owes them over N4 trillion in subsidy payments, power debts, and miscellaneous charges.
Chief Corporate Communications Officer of NNPC Limited, Olufemi Soneye, disclosed this collaborative effort in a statement on Monday.
He revealed that NNPC Limited will also actively participate in the reconciliation committee established by President Bola Tinubu.
This committee’s primary mission is to thoroughly investigate, review, and reconcile the financial records related to the alleged indebtedness by the Federation Accounts Allocation Committee (FAAC).
This decision comes in response to a request from an unnamed non-governmental organization (NGO), which has called for a comprehensive investigation into the funds supposedly owed by NNPC to the federation.
NNPC has staunchly refuted the allegations made by this NGO, contending that they lack substance, especially since NEITI itself dismissed many of the accusations in its 2021 report following numerous engagements with NNPC Ltd.
The company shed light on a significant challenge it faced regarding the sale of premium motor spirit (PMS) imported into the country at the inception of Tinubu’s administration. NNPC was compelled to sell PMS at one-third of its actual value, resulting in an average monthly subsidy bill of approximately N400 billion.
This, in turn, exerted significant pressure on NNPC’s revenues and finances.
As of May 31, 2023, the cumulative subsidy bill had surged to over N3.736 trillion.
Moreover, NNPC reported an indebtedness of N174.07 billion by the federation, primarily due to the non-payment of its share of upstream joint venture gas supplied to government-owned plants.
The report further highlights outstanding receivables due to NNPC Exploration & Production Limited (NEPL) as of May 31, 2023, amounting to $712 million, equivalent to N309.07 billion at the exchange rate of N434.08/US$1.
These revenues were not remitted to NEPL but instead paid into the Federation account.
While acknowledging that the Federation is owed N4.207 trillion as net indebtedness, NNPC emphasized that the Company is only indebted to the Federation in the sum of N2.852 trillion.
This amount primarily consists of outstanding Good and Valuable Consideration (GVC) related to government upstream divestments, royalties, and Petroleum Profit taxes (PPT).
NNPC reaffirmed its dedication to transparency and collaboration with NEITI.
In August 2020, NNPC became an EITI supporting company, demonstrating a cordial relationship with NEITI and a commitment to adhering to EITI’s supporting company expectations.
NNPC emphasized its open-book policy to all stakeholders and its unwavering commitment to delivering value to the Nigerian people with integrity.