Economy
FG auditors probe NNPCL’s N2.7tn subsidy refund claim
The Office of the Auditor-General of the Federation has received the necessary and complete documents required to verify the N2.7 trillion fuel subsidy claim by the Nigerian National Petroleum Company Limited against the government, The PUNCH reports.
This is as the procurement department of the finance ministry obtained the terms of reference and the scope of work to guide the process of hiring the external firm to support the OAuGF.
Recall that in April 2024, the Federal Government commenced a fresh audit of the N2.8tn fuel subsidy claim by the NNPCL.
An audit firm, KPMG, had conducted an initial audit, reducing the claims from N6tn to N2.7tn.
The PUNCH had reported that the audit would span from 2015 to 2021.
On May 30, 2023, a few hours after the “subsidy is gone” declaration by President Bola Tinubu, NNPCL’s Group Chief Executive Officer, Mele Kyari, told State House correspondents that the Federal Government still owed the firm the sum of N2.8tn spent on petrol subsidy.
While saying the NNPC footed petrol subsidy bills from its cash flow, Kyari said the government had so far been unable to pay back the N2.8tn.
He said, “Since the provision of the N6tn in 2022 and N3.7tn in 2023, we have not received any payment from the Federation.
“That means they (the Federal Government) are unable to pay and we’ve continued to support this subsidy from the cash flow of the NNPC. We are waiting for them to settle up to N2.8tn of NNPC’s cash flow from the subsidy regime and we can’t continue to build this.”
Providing an update in the minutes of the Federal Allocation Accounts Committee meeting for September 2024, the Director of Home Finance, Ali Mohammed, said the exercise would be judiciously carried out.
A section of the minutes with the heading ‘Update on the Forensic Audit Covering the Period 2015 to 2022 to Authenticate NNPC/Federation Claims in Respect of N2.7tn withheld by NNPC Limited’, stated that documents had been provided to conduct the task.
The minutes read, “The Director, Home Finance reported that the Office of the Auditor-General for the Federation was provided with the documents requested for conducting the assignment.
“He also reported that the Procurement Department of the Ministry had been given the Terms of Reference and the Scope of work to guide the process of hiring the External Firm that would support OAuGF in conducting the assignment.
“Contributing, the Chairman disclosed that he had engaged with the Auditor-General for the Federation on the matter, and there was a commitment by the OAuGF to diligently conduct the assignment with the support of the External Audit Firm as proposed. He assured that the Ministry will continue to follow up with OAuGF to ensure the successful conduct of the assignment.”
The director further asked that the topic be expunged from its discussions pending any future update.
“Based on that, he suggested and the meeting agreed that the matter be temporarily removed from the Matters Arising pending any future update,” he stated.
Experts monitoring the situation had expressed concerns about the probe following the exit of the former NNPCL CFO, Ajiya Umar, but the NNPCL spokesperson, Femi Soneye, dismissed the notion, stressing that the process is ongoing.
Soneye in a chat with our correspondent on Monday, said, “I can confirm that reconciliation is currently ongoing with the relevant government agencies and auditors. Once the process is completed, the public will be informed appropriately.”
Meanwhile, revenue-generating agencies have refunded a total sum of N1.19tn as arrears reconciled to the federation account in the first seven months of 2024.
This followed the reconciliation of unresolved revenue disbursement into the federation account.
The FAAC, in its meeting minutes, said, “The cumulative outstanding arrears reconciled and paid to the Federation Account from January to July 2024 stood at N1,190,686,027,547.39.
For July, the committee reported that $214.32m, equivalent to N289.01bn, was repaid to the CBN-designated account.
“For the Month of July 2024 Federation Account, the PMSC would like to inform the Plenary that as a result of reconciliation with Revenue Generating Agencies, a total sum of $214,322,512 equivalent to N289.01bn was reconciled and confirmed paid to the CBN designated accounts,” It noted.
The document further stated that “The total unresolved amount due to the Federation Account from the reconciliation meeting held with the Revenue Generating Agencies in September 2024 was $273,701,370.86 N3.65tn.
The agencies are NNPCL, the Nigerian Upstream Petroleum Regulatory Commission, and the Federal Inland Revenue Service.
“Members should note that these outstanding amounts are still being reconciled at the monthly reconciliation meetings between the Agencies and the Sub-Committee. Furthermore, the sum of $180,230,895 and N2.54tn outstanding payments from the Revenue Generating Agencies before June 2023 was referred to the Stakeholders Alignment Committee, and the Sub-Committee awaits the outcome of the reconciliation soonest.
“The Sub-Committee is working with the Revenue Generating Agencies to ensure that the above outstanding amounts are paid to the Federation Account as soon as possible.”
Commenting on the issue, an energy expert, Prof Wumi Iledare, queried why the NNPCL allowed such an amount to linger with the government.
He further noted that the audit should be extended to the amount collected by the national oil firm on behalf of the government.
Similarly, a Professor of Energy at the University of Lagos, Dayo Ayoade, noted that the relationship between the government and the national oil firm has always been shrouded in secrecy, making it difficult to ascertain transparency issues.
The naira depreciated to N1, 615 per dollar in the parallel market from N1,610 per dollar on Monday.
Likewise, the Naira depreciated to N1,602 per dollar in the Nigerian Foreign Exchange Market (NFEM).
Data published by the Central Bank of Nigeria, CBN, showed that the indicative exchange rate for the naira rose to N1,602 per dollar from N1,596 per dollar on Monday, indicating N6 depreciation for the naira.
Consequently, the margin between the parallel market and NFEM rate narrowed to N13 per dollar from N14 per dollar on Monday.
The Nigerian stock market opened the week on a bullish note on Monday, gaining N228 billion on the Nigerian Exchange Ltd.
Market capitalisation rose by N228 billion or 0.34 per cent and closed at N66.693 trillion compared to Friday’s figure of N66.465 trillion.
Similarly, the All-Share Index (ASI) climbed by 363.57 points or 0.34 per cent, reaching 106,116.18 from 105,752.61 recorded earlier.
The Nigerian stock market opened the week on a bullish note on Monday, gaining N228 billion on the Nigerian Exchange Ltd.
Market capitalisation rose by N228 billion or 0.34 per cent and closed at N66.693 trillion compared to Friday’s figure of N66.465 trillion.
Similarly, the All-Share Index (ASI) climbed by 363.57 points or 0.34 per cent, reaching 106,116.18 from 105,752.61 recorded earlier.
The positive trend was driven by strong buying interest in medium and large-cap stocks including International Breweries, Legend Internet Plc, Cadbury Nigeria, Fidson and more.
In spite of the upward trend, the market breadth closed positively, with 47 gainers and 16 losers.
International Breweries led the gainers’ chart, rising by 10 per cent to close at N8.47 per share.
Legend Internet Plc followed, appreciating by 9.97 per cent to settle at N7.50 per share.
Cadbury Nigeria gained by 9.96 per cent, and end the day at N29.25, while Fidson rose by 9.95 per cent to close at N20.45 per share.
Eterna also advanced by 9.90 per cent to close at N43.85 per share.
On the losers’ chart, Livestock Feeds dropped by 10 per cent, closing at N8.55 per share.
Aradel Holdings declined by 9.86 per cent to end the session at N448.00 per share
Tripple Gee fell by 9.60 per cent to close at N1.79, while John Holt Plc shed 7.94 per cent to close at N5.80 per share.
Linkage Assurance lost by 6.15 per cent, and finished the day at N1.22 per share.
A total of 500.59 million shares worth N12.110 billion were traded in 17,637 transactions.
This is compared to Friday’s 428.08 million shares worth N20.174 billion, exchanged across 14,284 transactions.
Access Corporation led the activity chart with 60.867 million shares traded, which was worth N1.45 billion.
Fidelity Bank followed with 56.105 million shares valued at N1.13 billion while the United Bank for Africa sold 34.53 million shares worth N1.174 billion.
Guarantee Trust Holding Company transacted 33.49 million shares valued at N2.181 billion and the Nigerian Breweries traded 28.336 million shares, amounting to N1.15 billion.
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