Audit Reveals NNPCL Inflated Subsidy Claims by N3.3 Trillion Under Buhari Administration, Tinubu Government Initiates Probe

A recent forensic audit by global accounting firm KPMG has unveiled substantial inflation in fuel subsidy claims by the Nigerian National Petroleum Company Limited (NNPCL). The audit discovered that NNPCL had inflated its subsidy claims by a staggering N3.3 trillion. Initially, NNPCL reported spending N6 trillion on fuel subsidies, with the previous administration under President Muhammadu Buhari covering a significant portion. However, NNPCL’s Group CEO, Mele Kyari, later claimed the federal government still owed the company N2.8 trillion for petrol subsidy payments, which had been covered from NNPCL’s cash flow.

Following this revelation, the Tinubu administration has committed to probing the activities of NNPCL during Buhari’s tenure. This investigation aims to verify the authenticity of NNPCL’s subsidy claims. A fresh audit of the N2.8 trillion claim, reduced to N2.7 trillion after KPMG’s reconciliation, will be conducted covering the period from 2015 to 2021.

The Office of the Auditor-General for the Federation (OAuGF) will lead this audit, with potential involvement from an external firm to ensure a thorough and conflict-free examination. This decision emerged from a Federal Account Allocation Committee (FAAC) meeting in March 2024, where various stakeholders, including state finance commissioners, discussed the need for an independent audit.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, reaffirmed President Bola Tinubu’s commitment to this forensic audit. Ogun State’s Commissioner for Finance advocated for engaging an independent auditor to avoid conflicts of interest, a view supported by the Niger State finance commissioner. However, Rivers State highlighted that an independent auditor alone might not guarantee success, suggesting a combined approach with OAuGF and external firms.

The Federal Commissioner, Revenue Mobilization, Allocation and Fiscal Commission/Chairman, Indices and Disbursement, emphasized that the audit aims to resolve outstanding claims, including the reconciled N2.7 trillion claim against NNPCL. KPMG’s audit had recommended further investigation, underscoring the need for a comprehensive and transparent review process.

The meeting concluded with an agreement that OAuGF would lead the audit, with external support enlisted as necessary to ensure a thorough examination.