The Nigerian National Petroleum Company Limited (NNPCL) has affirmed its commitment to working in partnership with the Nigeria Extractive Industries Transparency Initiative (NEITI) to examine the reported debts owed to the federation.
In a statement released on Monday, NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, disclosed that the oil company would collaborate with the pertinent stakeholders in the reconciliation committee initiated by President Bola Tinubu. This committee aims to examine, reassess, and reconcile the financial records concerning the purported debts attributed to the Federation Accounts Allocation Committee (FAAC).
Soneye added that this decision was made in response to a request from an undisclosed non-governmental organization (NGO), which had called for an investigation into numerous funds supposedly owed to the federation by NNPC.
“The NGO’s [call] was baseless, considering the fact that NEITI itself had dismissed many of the allegations in the said 2021 report, following a series of engagements with NNPC Ltd,” the statement read.
Acknowledging that it was mandated to retail imported premium motor spirit (PMS) in the country at a cost significantly lower than its true value during the onset of Tinubu’s administration, the company pointed out that this led to an average monthly subsidy expenditure of approximately N400 billion. This, as Soneye stated, exerted considerable pressure on the company’s financial resources and revenues.
According to the NNPC, the subsidy expenses had reached a cumulative total of more than N3.736 trillion by May 31, 2023. The company also noted that an accumulated debt of N174.07 billion owed by the federation was attributed to the non-payment of its portion of the gas supplied through upstream joint ventures to government-owned facilities.
“Similarly, the receivables due from the federation to NNPC Exploration & Production Limited (NEPL) as of 31st May 2023 amount to $712million (equivalent to N309.07 billion at N434.08/US$1) for revenues not remitted to NEPL but paid into the Federation account.”
“While the Federation owed NNPCL the sum of N4.207 trillion as net indebtedness, the Company was only indebted to the Federation in the sum of N2.852 trillion, made up mainly of outstanding Good and Valuable Consideration (GVC) in respect of government upstream divestments, royalties and Petroleum Profit taxes (PPT).”
“We would like to also 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 2020, joining a group of over 65 extractives companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners committed to observing the EITI’s supporting company expectations,” Soneye said.