National Oil Giant Under Fire: NNPCL Faces Accusations Of Financial Misconduct In Damning Audit Report

The Nigerian National Petroleum Company Limited (NNPCL) faces allegations of financial misconduct, including unauthorized deductions and revenue diversions, according to the Auditor-General of the Federation’s 2021 annual report.....KINDLY READ THE FULL STORY HERE▶

The 558-page report, submitted to the National Assembly in November 2024, highlights significant financial irregularities in the state-owned oil company. Among the key concerns raised were unauthorized deductions totaling ₦82.9 billion, purportedly allocated for refinery rehabilitation, without requisite approvals or documentation. This breaches both the Nigerian Constitution and the 2009 Financial Regulations.

Allegations of Mismanagement
The report criticized the NNPCL for irregular deductions from domestic crude oil sales, which violated statutory guidelines. It recommended that the Group Chief Executive Officer of NNPCL provide explanations to the Public Accounts Committees of the National Assembly and recover the lost funds for remittance to the government treasury.

The audit attributed these anomalies to weak internal controls within NNPCL, warning that such practices risk misappropriation of funds and significant financial losses to the federation.

Highlights of the Report

1. ₦82.9 Billion Unauthorized Deductions: These funds were deducted from crude oil and gas sales without approval or documented evidence.
2. ₦343.6 Billion Irregular Deductions: The report flagged deductions from domestic crude sales in March and May 2021, amounting to ₦343.6 billion, for costs such as pipeline maintenance and strategic stockholding, without justifiable documentation.
3. ₦83.6 Billion Misplaced Income: Miscellaneous income from 2016–2020 was found in the CBN/NNPCL sinking fund account instead of the Federation Account, a violation of financial regulations.

Violation of Financial Regulations
The deductions contravened Section 162 (1) of the Nigerian Constitution and several provisions of the 2009 Financial Regulations. The Auditor-General suspects the funds may have been diverted, recommending their recovery and remittance to the treasury.

Unexplained Transactions
The report also highlighted a controversial ₦3.7 billion paid to a company as a shortfall in sales of MT cargo of petrol. This transaction lacked detailed documentation, violating multiple financial regulations and raising concerns of impropriety.

Call for Accountability
The Auditor-General urged the NNPCL’s management to address these discrepancies and ensure compliance with extant financial laws. The report emphasized the need for stricter internal controls to safeguard public funds and prevent revenue leakages.