Federation Owes NNPCL N1.355trn As Reconciliation Continues
By InsideBusiness
The Federation Accounts may be owing Nigerian National Petroleum Company Limited (NNPC Ltd) about N1.355 trillion after the completion of the work of the Reconciliation Committee by President Bola Ahmed Tinubu to investigate, review, and reconcile the financial records on alleged indebtedness to the Federation by both NNPC Ltd. and the Federation Accounts Allocation Committee (FAAC).
The amount is arrived at after the deduction of NNPCL’s N2.852 trillion indebtedness from the N4.207 trillion owed to the oil company by the Federation.
“While the Federation owed NNPC Ltd. 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)”, the oil company stated in a statement issued on Monday night to address the calls by a non-governmental organisation for a probe of several monies allegedly owed to the Federation by the national oil company.
NNPC Ltd which stated that it is working with NEITI on its 2021 report stated that 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.
In a statement by Olufemi O. Soneye, the Chief Corporate Communications Officer, NNPC Ltd. stated that it was made to sell Premium Motor Spirit (PMS) imported into the country at one-third of its value, a development that gave rise to an average of N400 billion monthly subsidy bill, which subsequently put a strain on its revenues and finances at the outset of President Bola Ahmed Tinubu’s administration.
NNPC Ltd. further stated that the N400 billion bill was in addition to “a subsidy bill that had accumulated to about N3.736 trillion as of May 31st, 2023.
He stated that with respect to gas-to-power debts, the non-payment of NNPC Ltd.’s share of upstream joint venture gas supplied to the government-owned plants led to the accumulation of indebtedness of N174.07 billion by the Federation.
Similarly, the receivables due from the federation to NNPC Exploration & Production Limited (NEPL) as of 31st May 2023 amount to $712 million (equivalent to N309.07 billion at N434.08/US$1) for revenues not remitted to NEPL but paid into the Federation account.
Soneye also clarified that over the years, NNPCL’s relationship with NEITI has been very cordial, citing August 2020 when the company became an EITI supporting company, joining a group of over 65 extractive companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners committed to observing the EITI’s supporting company expectations.
“Indeed, aside from being a signatory to several of EITI’s global ethics and standards, NNPC Ltd., on the sidelines of the United Nations General Assembly (UNGA) in New York in September this year, signed up to the United Nations Global Compact on human rights, labour, environment, and anti-corruption, thereby becoming the first state-owned oil company to join the global initiative”, Soneye stated.
He concluded that NNPC Ltd.’s book remains open to all our stakeholders as it remains committed to delivering value to Nigerians with integrity and as espoused in its principles of Transparency, Accountability and Performance Excellence (TAPE), the bulwark of the Mele Kyari leadership of the company.
