Federation Owes NNPC N4.207 Trillion – Spokesperson

The spokesperson of the Nigerian National Petroleum Company Limited (NNPC Ltd), Olufemi Soneye, has revealed that the Federation owes the Company a substantial N4.207 trillion.

In a statement issued in Abuja, Soneye, NNPC’s Chief Corporate Communications Officer, also revealed that the national oil company, in turn, owed the Federation an amount of N2.852 trillion in unremitted revenue, resulting in a net balance of N1.355 trillion in favour of NNPC.

Soneye further affirmed NNPC’s commitment to collaborate with the Nigeria Extractive Industries Transparency Initiative (NEITI) and other relevant stakeholders within the Reconciliation Committee, established by President Bola Ahmed Tinubu.

This committee aims to investigate, review, and reconcile the financial records related to the alleged indebtedness of both NNPC Ltd. and the Federation Accounts Allocation Committee (FAAC) to the Federation.

The clarification was prompted by calls from a non-governmental organization for an inquiry into multiple debts purportedly owed to the Federation by the Company.

Soneye emphasized that these claims were unsubstantiated, particularly in light of NEITI’s dismissal of many allegations in its 2021 report following extensive discussions with NNPC Ltd.

He further explained that during President Bola Ahmed Tinubu’s administration, NNPC had been mandated to sell Premium Motor Spirit (petrol) at one-third of its value upon importation into the country. This decision led to a substantial monthly subsidy bill of approximately N400 billion, which strained the Company’s revenues and finances.

He stated, “That subsidy bill accumulated up to N3.736 trillion as of May 31st, 2023.

“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.

“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).

“We would also like to 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, joining a group of over 65 extractive companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners committed to observing the EITI supporting company expectations”, he added.

He further explained that “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, NNPC 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.

“NNPC Ltd’s book remains open to all our stakeholders as we remain committed to delivering value to Nigerians with integrity and as espoused in our principles of Transparency, Accountability and Performance Excellence (TAPE), the bulwark of the Mele Kyari leadership of the company”.