The Federal Government (FG) of Nigeria and the Nigerian National Petroleum Company Limited (NNPCL) are collaborating to address a substantial fuel subsidy debt totaling ₦7.74 trillion.
This debt is slated for settlement over a 210-day period, as detailed in recent minutes from the Federation Account Allocation Committee (FAAC) meeting.
The fuel subsidy debt has been a contentious issue, with NNPCL previously claiming outstanding payments amounting to ₦2.8 trillion for covering petrol subsidy costs.
NNPCL’s Group Chief Executive Officer, Mele Kyari, highlighted that the company had been financing the subsidy from its cash flow due to delays in government reimbursements.
In response to these claims, the FG initiated a forensic audit to authenticate NNPCL’s subsidy claims from 2015 to 2021. An initial audit by KPMG had reduced the claims from ₦6 trillion to ₦2.7 trillion.
The ongoing audit aims to verify the legitimacy of these claims and ensure transparency in the subsidy payment process.
Further complicating the issue are discrepancies in exchange rate applications. NNPCL has reportedly not complied with the Central Bank of Nigeria’s revised exchange rates for converting federation revenue, leading to potential financial discrepancies.
The FAAC has expressed concerns over this non-compliance and is considering measures to address the situation.
