The Nigerian National Petroleum Company Limited has requested an additional subsidy refund of N1.19 trillion for July 2024.
They cited exchange rate differentials on Premium Motor Spirit importation and joint venture taxes, according to findings by our correspondent.
But state governments tackled the national oil company over the latest request, as they raised concerns over NNPCL’s accounting practices.
These findings were based on the Federation Account Allocation Committee Postmortem Sub-Committee report for September 2024, which was obtained by The PUNCH on Monday.
The report revealed that exchange rate differentials stood at N4.56tn as of June 2024 (due to under-recovery on petrol imports between August 2023 and June 2024), but this figure increased to N5.31tn by July 2024.
The NNPCL attributed the rise to fluctuations in foreign exchange rates and unresolved subsidy payments from previous months.
The total figure adds to concerns over the fiscal impact of subsidy payments on the Federation Account.
Exchange rate fluctuations and the rising cost of importing PMS have continued to strain government revenues, raising questions about the sustainability of the partial subsidy framework.
The FAAC Sub-Committee raised concerns over NNPCL’s accounting practices, noting discrepancies in the figures submitted.
The NNPCL’s report included N1.19tn as a balance brought forward, contributing to the overall claim of N5.31tn.
However, the Sub-Committee noted that this amount had not been included in earlier FAAC reports and was therefore not recognised in its deliberations.
The report read, “As of June 2024, the Exchange Rate Differentials stood at N4,558,597,379,030.6. This amount increased to N5,309,418,715,637.13 as of the July 2024 Federation Account.
“Note that NNPCL’s request for the application of Weighted Average Rate covers the period August to June 2024. Also, recall that all outstanding payments against NNPCL as of May 2024 were referred to the Presidential Alignment Committee for reconciliation.
“However, the Sub-Committee observed that NNPCL in their report included the sum of N1,186,540,693,485.36 as an amount brought forward totalling N5,309,418,715,637.13 in their ledger. FAAC Postmortem did not recognize the Balance Brought Forward because it was not included in the FAAC report earlier submitted.”