The Nigerian National Petroleum Company Limited (NNPCL) has reaffirmed its commitment to working closely with the Nigeria Extractive Industries Transparency Initiative (NEITI) and all relevant stakeholders in the Reconciliation Committee established by President Bola Tinubu.
This committee’s primary objective is to investigate, review, and reconcile financial records pertaining to alleged indebtedness to the Federation by both NNPC Limited and the Federation Accounts Allocation Committee (FAAC).
According to a statement by Olufemi O. Soneye, NNPC Ltd’s Chief Corporate Communications Officer,
this announcement follows recent calls from a non-governmental organization for a comprehensive probe into monies allegedly owed to the Federation by the national oil company. NNPC Ltd has responded to these allegations, asserting that the claims made by the NGO are baseless, particularly in light of NEITI’s previous dismissal of many allegations from a 2021 report. These dismissals followed a series of engagements between NEITI and NNPC Ltd.
NNPC Ltd explained that during the early stages of President Bola Ahmed Tinubu’s administration, it was compelled to sell Premium Motor Spirit (PMS) at a significantly reduced price, causing an average monthly subsidy bill of N400 billion. This substantial subsidy expenditure strained the company’s revenues and finances and led to an accumulation of up to N3.736 trillion as of May 31st, 2023.
The issue of gas-to-power debts was also addressed. Non-payment of NNPCL’s share of upstream joint venture gas supplied to government-owned plants resulted in a debt of N174.07 billion to the Federation.
Additionally, receivables owed to NNPC Exploration & Production Limited (NEPL) amounted to $712 million (equivalent to N309.07 billion) as of May 31st, 2023, for revenues not remitted to NEPL but paid into the Federation account.
As of the same date, the Federation owed NNPCL a total of N4.207 trillion as net indebtedness, while the company was only indebted to the Federation for N2.852 trillion, primarily comprising outstanding Good and Valuable Consideration (GVC) related to government upstream divestments, royalties, and Petroleum Profit Taxes (PPT).
NNPC Ltd emphasized its longstanding and positive relationship with NEITI, highlighting its commitment to global ethics and standards. The company became an EITI supporting company in August 2020, joining a group of over 65 extractives companies and industry partners dedicated to observing EITI’s expectations.
In a groundbreaking move, NNPC Ltd signed up to the United Nations Global Compact on human rights, labor, environment, and anti-corruption during the United Nations General Assembly (UNGA) in Washington, D.C., in September 2023. This milestone made NNPC Ltd the first state-owned oil company to join this global initiative.
NNPC Ltd says it remains dedicated to delivering value to Nigerians with transparency, accountability, and performance excellence, in line with its principles as outlined by the Mele Kyari leadership of the company.