Despite NEITI’s N2.8 Trillion Under Remittance Claim, FG Still Owing NNPC N4.1 Trillion As Fuel Subsidy Debt

The latest report of the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the defunct Nigeria National Petroleum Corporation (NNPC) refused to remit N2.8 trillion to the Federal Government in 2021.

Recall that NEITI had last Monday disclosed in its 2021 oil and gas report unveiled in Abuja that the defunct NNPC failed to remit $1.9 billion (N2.8 trillion) to the Federation Account Allocation Committee (FAAC) before the transition into a commercial venture.

The national oil company transitioned to NNPC Limited on July 19, 2022, to operate as a commercial entity under the regulation of the Companies and Allied Matters Act (CAMA).

However, Naija News has gathered that sources close to the presidency have also confirmed that despite NEITI’s claim of under-remittance to FAAC, the federal government also owes NNPC a sum of N4.1 trillion ($9.74 billion) as debt incurred from fuel subsidy.

President Bola Tinubu had on May 29 ended the fuel subsidy regime, saying it was no longer sustainable for the government.

Before the removal of the petrol subsidy, the NNPCL, which was the sole importer of petrol in the country, spent about N400 billion monthly on behalf of the federation through an arrangement known as under-recovery (subsidy).

Between January 2023 and May 2023, petrol under-recovery totalled N1.828 trillion which is 55 percent higher than the N1.27 trillion paid in the corresponding period of 2022.

According to The Guardian, presidential sources said the FAAC, in several letters, have requested the payment of about N2.8trn that NNPC is allegedly owing the federation accounts in 2021.

But NNPCL has refused to pay the money while also claiming that the federal government owes it N4.1 trillion as subsidy debt.

One of the sources, who pleaded anonymity, said, “The federation owes NNPC almost 4.1 trillion, and NNPC owes about N2.8 trillion to the federal government, so they should actually give it a cheque for the debt of N1.3trn they owe NNPC Limited. 

“So many things have been told to Mr President since assuming office by some vested interests that NNPC Limited has refused to pay into the federation accounts.

“And because we want the general public to know the truth, NNPC Limited management wrote the President to investigate the matter, and Mr President has graciously approved that an inter-agency committee be set up to investigate and reconcile the matter.”

Already, President Tinubu has set up an inter-agency committee to resolve the lingering row between the NNPC Limited and FAAC in the last couple of years.

It was, however, learned that a preliminary report has been submitted by the committee to the President.