NNPC is currently facing fresh scrutiny as Auditor-General flags failure to remit ₦12.7bn operating surplus.
NaijaOnPoint Nigeria reports that Nigeria’s national oil company, the Nigerian National Petroleum Company Limited (NNPC Ltd.), is under renewed scrutiny after the Auditor-General of the Federation accused it of failing to remit ₦12.721 billion, one-fifth of its 2020 operating surplus into the government’s General Reserve Fund, in violation of the Fiscal Responsibility Act (FRA) 2007.
The observation is contained in the Auditor-General’s latest 808-page annual report submitted to the National Assembly, deepening concerns about fiscal accountability during NNPC’s transition from a public corporation to a limited liability company.
According to the report, auditors found “no evidence” that NNPC remitted the mandatory 20% of its 2020 operating surplus to the reserve fund, as required under Section 22(1) of the FRA. The company also reportedly failed to provide any justification for the non-compliance.
The Auditor-General warned that the lapse exposes the country to risks including potential fund diversion, wasteful expenditure, and depletion of a fiscal buffer designed to stabilise government finances.
NNPC Cites New Legal Status
In its response, NNPC argued that the Fiscal Responsibility Act no longer fully applies to the company following its restructuring under the Companies and Allied Matters Act (CAMA) 2020 and the Petroleum Industry Act (PIA) 2021. According to the management, NNPC now operates as a commercially-driven entity governed by company law and is no longer subject to rules designed for public corporations.
The company also claimed to have reconciled and settled its liabilities with the Office of the Accountant-General, though the audit report did not confirm payment of the ₦12.7 billion or specify any settlement details. NNPC added that dividend payments to the Federal Government now serve the same purpose as statutory surplus remittances.
But the Auditor-General rejected the explanation, stressing that the obligations under review relate to 2020—before NNPC became a limited liability company. As such, the audit insisted the findings remain valid until NNPC complies with the recommendations.
Lawmakers Directed to Act
The report urged the Public Accounts Committees of the National Assembly to take decisive steps. Among the directives, the committees are expected to compel the NNPC’s group chief executive officer to:
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justify the non-remittance of the ₦12.721 billion,
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remit the outstanding amount without delay,
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submit evidence of compliance to the legislature, and
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face sanctions for “failure to collect and account for government revenue” as outlined in the Financial Regulations (2009).
Mele Kyari, who served as NNPC GCEO in 2020 when the infraction occurred, was removed earlier this year and replaced by Bayo Ojulari.
Broader Fiscal Implications
NNPC has become a crucial revenue source for the Federal Government, particularly since the removal of fuel subsidies in 2023. Analysts warn that even seemingly modest gaps in remittances can significantly impact national finances due to NNPC’s central role in the economy.
The controversy also emerges amid multiple ongoing investigations. The Economic and Financial Crimes Commission (EFCC) is currently probing 14 officials including former GCEOs Mele Kyari and Abubakar Yar’Adua over an alleged $2.7 billion fraud linked to refinery rehabilitation.
Despite large and recurring budget allocations, the Kaduna, Warri, and Port Harcourt refineries have recorded zero production for years, raising questions about transparency in their funding and maintenance.
Meanwhile, the Senate Committee on Public Accounts is examining an alleged ₦210 trillion discrepancy in NNPC’s audited accounts between 2017 and 2023. The Auditor-General’s 2021 report likewise flagged unauthorised deductions and diversion of ₦514 billion.