OAuGF Receives Complete Documents for N2.7tn Fuel Subsidy Audit.
By Bala Salihu Dawakin kudu
December 3, 2024
The Office of the Auditor-General for the Federation (OAuGF) has confirmed receipt of all necessary documents required to verify the N2.7 trillion fuel subsidy claim by the Nigerian National Petroleum Company Limited (NNPCL) against the government.
This development comes as the procurement department of the Ministry of Finance finalizes the terms of reference and scope of work for hiring an external audit firm to support the OAuGF in the review process.
Background to the Audit
In April 2024, the Federal Government initiated a fresh forensic audit of the N2.8 trillion fuel subsidy claim, spanning the years 2015 to 2021. An earlier audit conducted by KPMG had reduced the claims from N6 trillion to N2.7 trillion.
The issue gained prominence after President Bola Tinubu’s “subsidy is gone” declaration on May 29, 2023. Hours after the announcement, NNPCL Group Chief Executive Officer, Mele Kyari, revealed that the Federal Government owed the company N2.8 trillion for petrol subsidies.
Kyari explained that NNPCL had been financing the subsidy from its cash flow since 2022, as the government had failed to settle the debt. “We can’t continue to build this,” Kyari stated, emphasizing the financial strain on the corporation.
Minutes from the September 2024 Federal Allocation Accounts Committee (FAAC) meeting provide critical updates. Under 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,’ the Director of Home Finance, Ali Mohammed, noted significant progress.
“The Office of the Auditor-General for the Federation was provided with the documents requested for conducting the assignment,” the minutes revealed.
The procurement department of the finance ministry has also set the groundwork for engaging an external audit firm to assist the OAuGF. This collaboration aims to ensure transparency and accuracy in verifying NNPCL’s subsidy claims.
FAAC Chairman reassured members that the Auditor-General is committed to conducting the audit thoroughly with the support of the external firm. He also pledged that the ministry would closely monitor the process to ensure its successful completion.
Temporary Removal from FAAC Discussions
Pending further updates, the committee agreed to temporarily expunge the matter from its Matters Arising section. “The director suggested, and the meeting agreed, that the matter be temporarily removed pending any future update,” the minutes stated.
Despite concerns about potential delays, particularly following the departure of former NNPCL Chief Financial Officer Ajiya Umar, the corporation assured stakeholders of progress.
NNPCL spokesperson, Femi Soneye, dismissed worries about disruptions. “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,” Soneye said.
The forensic audit represents a critical step in addressing longstanding questions around fuel subsidy payments. As government agencies collaborate to ensure a transparent review process, the outcome will likely have significant implications for Nigeria’s fiscal accountability and subsidy management.
