The Auditor-General’s office has received documents to verify NNPCL’s N2.7 trillion fuel subsidy claim, initiating a crucial audit process.

[dropcap]T[/dropcap]he Office of the Auditor-General of the Federation has officially received the necessary documents to proceed with verifying the Nigerian National Petroleum Company Limited’s (NNPCL) N2.7 trillion fuel subsidy claim.

This development follows the commencement of a fresh audit by the Federal Government in April 2024, focusing on NNPCL’s claim regarding petrol subsidy payments made between 2015 and 2021.

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An initial audit by KPMG in 2023 had reduced the claim from a staggering N6 trillion to N2.7 trillion, sparking further scrutiny into the validity and transparency of the process.

The Ministry of Finance’s procurement department has also received the terms of reference and the scope of work, which will guide the hiring of an external audit firm to support the ongoing investigation, as part of the audit process.

The scope of the assignment aims to authenticate the claims made by NNPCL and ensure proper reconciliation of fuel subsidy-related funds.

In May 2023, NNPCL’s Group CEO, Mele Kyari, revealed that the Federal Government still owed the company N2.8 trillion for petrol subsidy payments, stating that the corporation had been funding the subsidy from its cash flow due to the government’s inability to repay the outstanding amount.

Despite the declared end of the subsidy, Kyari confirmed that the debt remained unsettled, raising concerns over the sustainability of such an arrangement.

In the latest update from September 2024, the Director of Home Finance, Ali Mohammed, reported that all documents required for the audit had been provided, and the procurement process for hiring the external firm was in motion.

The update further highlighted the Ministry’s commitment to ensuring a thorough and transparent process, with full cooperation from the relevant agencies.

Despite initial concerns about the impact of leadership changes within NNPCL, such as the departure of the former CFO, Ajiya Umar, NNPCL spokesperson Femi Soneye assured that the reconciliation process was ongoing, with collaboration from all relevant government agencies.

Additionally, the Federation Account Allocation Committee (FAAC) reported that a total of N1.19 trillion had been reconciled and refunded to the Federation Account in 2024, following outstanding revenue disbursement issues.

However, significant amounts remain unresolved, with the reconciliation process expected to continue until all discrepancies are addressed.

Energy experts, including Prof. Wumi Iledare and Prof. Dayo Ayoade, have expressed concerns regarding the prolonged unresolved subsidy claims, calling for more transparency and a broader audit of the amounts NNPCL has collected on behalf of the government.

They also emphasised the need for a more open relationship between the national oil company and the government to ensure accountability.

As the audit continues, the public eagerly awaits updates on the final reconciliation and the government’s efforts to settle the N2.7 trillion fuel subsidy claim.