The Nigerian National Petroleum Company Limited (NNPC Ltd.) is committed to maintaining a collaborative relationship with the Nigeria Extractive Industries Transparency Initiative (NEITI) and all relevant stakeholders within the Reconciliation Committee established by President Bola Ahmed Tinubu. This committee’s primary purpose is to thoroughly investigate, review, and reconcile the financial records pertaining to the alleged indebtedness of both NNPC Ltd. and the Federation Accounts Allocation Committee (FAAC) to the Federation.
This action is in response to recent calls made by a non-governmental organization, urging a comprehensive probe into the monies purportedly owed to the Federation by the national oil company. In an official statement issued by the Chief Corporate Communications Officer of NNPC Ltd. in Abuja, Mr. Olufemi O. Soneye, it was emphasized that the claims put forth by the aforementioned non-governmental organization lack substantiated merit. This assertion is rooted in the fact that NEITI itself had previously dismissed many of the allegations presented in its 2021 report, following a series of constructive engagements and discussions with NNPC Ltd.
Soneye further clarified that during the early stages of President Bola Ahmed Tinubu’s administration, NNPC Ltd. was compelled to sell Premium Motor Spirit (PMS) imported into the country at a rate significantly below its market value. This pricing structure resulted in a monthly subsidy burden averaging N400 billion, significantly straining NNPC Ltd.’s revenue and financial resources. He further underscored that this subsidy burden had accumulated to N3.736 trillion as of May 31st, 2023.
Regarding gas-to-power debts, NNPC Ltd.’s non-receipt of its share of the upstream joint venture gas supplied to government-owned plants led to an accumulation of a N174.07 billion indebtedness to the Federation. Additionally, outstanding receivables owed to NNPC Exploration & Production Limited (NEPL) as of May 31, 2023, amounted to $712 million, equivalent to N309.07 billion at an exchange rate of N434.08/US$1. It was noted that these funds were not remitted to NEPL but rather deposited into the Federation account.
The overall financial position was summarized, indicating that while the Federation owed NNPC Ltd. a total of N4.207 trillion as net indebtedness, NNPC Ltd. was only indebted to the Federation in the amount of N2.852 trillion. This indebtedness primarily comprised outstanding Good and Valuable Consideration (GVC) related to government upstream divestments, royalties, and Petroleum Profit taxes (PPT).
It is essential to clarify that NNPC Ltd. has maintained a harmonious and productive relationship with NEITI over the years. This commitment was underscored in August 2020 when NNPC Ltd. became an EITI supporting company, joining a distinguished group of over 65 extractive companies, state-owned enterprises (SOEs), commodity traders, financial institutions, and industry partners dedicated to upholding EITI’s supporting company expectations. In a significant development, NNPC Ltd. became the first state-owned oil company to join the United Nations Global Compact on human rights, labor, environment, and anti-corruption, during the United Nations General Assembly (UNGA) held in New York in September of the current year.
NNPC Ltd. reaffirms its unwavering commitment to delivering value to the Nigerian people, firmly rooted in the principles of Transparency, Accountability, and Performance Excellence (TAPE), which are the cornerstones of the Mele Kyari leadership of the organization. The company remains dedicated to operating with integrity and transparency, with its doors open to all stakeholders.
