NNPCL to Work with NEITI, Reconciliation Committee on Alleged Federation Debt

The Nigerian National Petroleum Company Limited (NNPCL) has said it will cooperate with the Nigeria Extractive Industries Transparency Initiative (NEITI) and the reconciliation committee set up by President Bola Tinubu to review and reconcile its alleged debt to the federation.

This was contained in a statement issued on Monday by the NNPCL Chief Corporate Communications Officer, Olufemi Soneye, in response to a call by an unnamed non-governmental organisation (NGO) for a probe of several monies allegedly owed by the NNPC to the federation.

Soneye said the NGO’s call was unfounded, as NEITI itself had cleared many of the allegations in its 2021 report after engaging with the NNPCL.

He explained that the NNPCL had to sell premium motor spirit (PMS) imported into the country at a subsidised price when President Tinubu came into power, which resulted in an average monthly subsidy bill of N400 billion, putting pressure on its revenues and finances.

He said the subsidy bill had accumulated to over N3.736 trillion as of May 31, 2023. He also said the federation owed the NNPCL N174.07 billion for its share of upstream joint venture gas supplied to government-owned plants, which was not paid.

He added that the federation also owed NNPCL Exploration & Production Limited (NEPL) $712 million (equivalent to N309.07 billion at N434.08/US$1) as of May 31, 2023, for revenues that were paid into the Federation account instead of NEPL.

He stated that while the net debt of the federation to the NNPCL was N4.207 trillion, the NNPCL only owed the federation N2.852 trillion, mainly for outstanding good and valuable consideration (GVC) in respect of government upstream divestments, royalties, and petroleum profit taxes (PPT).

He further stated that the NNPCL had a cordial relationship with NEITI, as evidenced by its becoming an EITI supporting company in 2020, joining a group of over 65 extractive companies, state-owned enterprises (SOEs), commodity traders, financial institutions, and industry partners committed to observing the EITI’s supporting company expectations.