“FG Owing N4.207trn”: NNPC Finally Speaks on Alleged Indebtedness to Federation
- NNPC has responded to allegations by some groups that it is indebted to the federation
- The company in a statement said it is working with relevant parties on the allegation
- It clarified that it only owes FG N2.852 trillion while the federation owes the company N4.207 trillion
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market
The Nigerian National Petroleum Company Limited (NNPCL) has said it is working with relevant parties in the reconciliation committee set up by President Bola Tinubu to investigate, review, and reconcile the financial records on alleged indebtedness to the federation.
Source: UGC
Olufemi Soneye, NNPCL Chief Corporate Communications Officer made this known in a statement on Monday, November 6, 2023, according to ChannelsTV report.
NNPC stated that the development was necessary following the call for a probe by an unnamed non-governmental organization (NGO).
The NGO had demanded an investigation on monies that were allegedly owned by the NNPC to the government
Legit.ng earlier reported that the NNPC failed to remit about $6.8 billion to the federation account.
NNPC defends
In its response, the NNPC said the claim was baseless. It cited the fact that NEITI in a 2021 report had dismissed many of the allegations after engaging with the NNPC Limited.
At the beginning of Tinubu’s administration, the company explained that it sold imported premium motor spirit (PMS) at one-third of its value. It noted that this resulted in an average of N400 billion monthly subsidy bill.
According to NNPC, this put a strain on its revenues and finances.
In a breakdown, the company revealed that as of May 31, 2023, the subsidy bill had reached over N3.736 trillion.
It added that due to non-payment of its share of upstream joint venture gas supplied to government-owned plants, the federation’s debt accumulation of N174.07 billion.
As of 31st May 2023, it added that the receivables due from the federation to NNPC Exploration & Production Limited (NEPL) were $712million (equivalent to N309.07 billion at N434.08/US$1).
Accumulating all debt, it noted,
“While the Federation owed NNPCL the sum of N4.207 trillion as net indebtedness, the Company was only indebted to the Federation in the sum of N2.852 trillion, made up mainly of outstanding Good and Valuable Consideration (GVC) in respect of government upstream divestments, royalties and Petroleum Profit taxes (PPT).
NNPC Abandons Crude Oil Swap, to Spend N843 Billion Monthly Importing Petrol
Legit.ng reported that the NNPC might be spending about N843 billion monthly on petrol imports following the halt in oil swaps by the company.
The company is currently the only petrol importer in Nigeria and recently began buying petrol with cash tenders rather than oil swaps.
The crude oil swap, known as Direct Sale or direct Purchase, which has existed for almost a decade, allows NNPC to sell crude to refiners, supplying the company with the equivalent of refined petroleum products.
Source: Legit.ng
