How NNPCL embezzled ₦2.68 trillion and $9.77 million – FG
The Nigerian National Petroleum Company Limited (NNPCL) has been accused of engaging in financial irregularities by the Auditor-General of the Federation, who claims the company diverted ₦2.68 trillion and $9.77 million over the last four years.
These allegations come amidst growing criticism of NNPCL’s financial practices, which have reportedly worsened Nigeria’s economic challenges.
An analysis of the Auditor-General’s reports from 2017 to 2021, as reviewed by Sunday PUNCH, highlights significant financial breaches. In 2017, ₦1.33 trillion was allegedly diverted, followed by ₦681.02 billion in 2019, ₦151.12 billion (and $19.77 million) in 2020, and ₦514 billion in 2021. These infractions were said to violate provisions of Nigeria’s Constitution and the 2009 Financial Regulations Act.
The Auditor-General’s reports, submitted to the National Assembly, also accuse NNPCL of poor corporate governance, highlighting its failure to respond to or justify the findings during the review period.
Financial Mismanagement in Focus
NNPCL has faced criticism from both local and international organizations, including the World Bank, which labeled the company as lacking transparency. In its December 2023 Nigeria Development Update, the World Bank highlighted concerns about NNPCL’s lack of clarity regarding subsidy arrears and the removal of subsidies’ impact on national revenue.
Former Central Bank Governor Sanusi Lamido Sanusi also condemned NNPCL, calling it “the most opaque oil company in the world.”
The audit detailed 14 financial infractions, including unauthorized deductions, discrepancies in crude oil allocations, and failure to report losses. Below is a breakdown of the key findings by year:
2017
NNPCL reportedly deducted ₦1.33 trillion from ₦2.41 trillion in revenue without authorization, leaving only ₦1.07 trillion in the federation account. This action violated Section 162 (1) of the 1999 Constitution, which mandates all federal revenue be deposited into a designated Federation Account.
2019
In 2019, the Auditor-General identified seven major irregularities totaling ₦681.02 billion. For instance, NNPCL remitted only ₦519.92 billion of ₦1.27 trillion accrued through the National Petroleum Investment Management Services. Other issues included unexplained discrepancies in crude oil allocation and unauthorized deductions of $1.278 billion from joint venture royalties.
2020
The audit revealed ₦151.12 billion in unauthorized deductions in 2020, reportedly allocated for priority projects and handling costs without supporting documentation or approvals.
2021
NNPCL’s SAP payment records for 2021 revealed deductions of ₦343.64 billion from crude oil sales as operational costs, with no explanation or breakdown. An additional ₦50 billion due to the federation account was not remitted, and ₦82.95 billion allocated for refinery rehabilitation was deducted without authorization.
Other anomalies included misreporting ₦3.75 billion from petrol sales and diverting ₦83.66 billion in miscellaneous income into a sinking fund account instead of the federation account, forcing the government to borrow funds to cover the deficit.
Concerns Over Governance and Financial Management
The Auditor-General’s findings underscore significant weaknesses in NNPCL’s internal controls and raise serious concerns about the company’s financial management practices. These lapses not only impact Nigeria’s financial stability but also call into question the company’s commitment to transparency and accountability.
