NNPC to collaborate with NEITI to investigate alleged indebtedness to federation account

The Nigerian National Petroleum Company Limited (NNPC) says it will continue to collaborate with the Nigeria Extractive Industries Transparency Initiative (NEITI) to review its alleged indebtedness to the federation.

Olufemi Soneye, chief corporate communications officer, NNPC Limited, said this in a statement on Monday.

NNPC said it would also work with relevant parties in the reconciliation committee set up by President Bola Tinubu to investigate, review and reconcile the financial records on alleged indebtedness by the federation accounts allocation committee (FAAC). 

The company said the decision was reached after an unnamed non-governmental organisation (NGO) called for a probe of several monies allegedly owed to the federation by NNPC.

NNPC said the claims by the “NGO were 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”. 

According to the company, it was made to sell premium motor spirit (PMS) imported into the country “at one third of its value” at the start of Tinubu’s administration,

This resulted in an average of N400 billion monthly subsidy bill, Soneye said, adding that it subsequently put a strain on its revenues and finances.

NNPC said the subsidy bill accumulated to over N3.736 trillion as of May 31, 2023.

An accumulation of N174.07 billion in indebtedness by the federation was also recorded, according to NNPC, due to non-payment of its share of upstream joint venture gas supplied to government-owned plants.

“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,” Soneye said. 

“While the Federation owed NNPCL the sum of N4.207trillion 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 in 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.”

NNPC said its book remains open to all its stakeholders, as it remains committed to delivering value to Nigerians with integrity.