Audit Exposes N514 Billion Financial Irregularities in NNPCL Operations

The Office of the Auditor-General for the Federation has uncovered a staggering N514 billion in financial irregularities within the operations of the Nigerian National Petroleum Company Limited (NNPCL) during the 2021 financial year. This was revealed in a recently cited audit report, detailing instances of non-compliance and internal control weaknesses across various Ministries, Departments, and Agencies (MDAs) for the same year.

The audit highlighted several significant infractions, including irregular deductions of N343.64 billion from domestic crude sales, unauthorized deductions of N82.95 billion for refinery rehabilitation, and the unsubstantiated payment of N3.75 billion related to the sale of petrol. Additionally, the NNPCL warehoused N83.66 billion from the federation’s miscellaneous income into a sinking fund account.

These actions were found to violate the Constitution of the Federal Republic of Nigeria and the 2009 Financial Regulations Act, as outlined in the audit report. According to the document, the NNPC (now NNPCL) made unauthorised deductions from the total amount generated from domestic crude sales in March and May 2021, totaling N484.73 billion. From this, N343.64 billion was deducted as NNPC value shortfall, strategic stock holding costs, pipeline losses, and maintenance costs, with no supporting documentation provided to justify these deductions.

The report noted that in May 2021, the net amount that should have been remitted to the Federation Account was N127.075 billion, but only N77.075 billion was sent, leaving a balance of N50 billion unaccounted for. The audit attributed these discrepancies to weak internal controls within the NNPC, which may have resulted in potential revenue loss, diversion of public funds, or misappropriation of state resources.

These infractions occurred prior to NNPC’s rebranding into NNPCL in July 2022, which marked its transformation into a commercial entity. In contrast, in 2024, NNPCL released its audited financial statement, reporting a net profit of N3.3 trillion for the 2023 financial year. This followed the company’s historic move to release financial reports for the first time in 43 years in 2020.