The Office of the Auditor-General for the Federation (OAuGF) has revealed financial irregularities amounting to a staggering N514 billion in the operations of the Nigerian National Petroleum Company Limited (NNPCL) during the 2021 financial year.
The findings were disclosed in an audit report highlighting non-compliance and internal control weaknesses across Ministries, Departments, and Agencies (MDAs).
The audit flagged four major financial infractions. These include irregular deductions totaling N343.64 billion from domestic crude sales, the warehousing of N83.66 billion in a sinking fund account from miscellaneous income, unauthorized deductions of N82.95 billion for refinery rehabilitation, and an unsubstantiated payment of N3.75 billion for the sale of petrol.
According to the report, the flagged activities breached the Nigerian Constitution and the 2009 Act of Financial Regulations.
The OAuGF stated, “The sum of N343.64 billion from the gross domestic crude sales was unilaterally deducted as NNPC Value Shortfall, Strategic Stock Holding Cost, Crude Oil and Products Pipeline Losses, as well as pipelines maintenance and management costs.
However, the details of these deductions were not made available for audit review, raising concerns over their justification."
The audit also highlighted discrepancies in remittances to the Federation Account. In May 2021, the net payable amount from domestic crude sales was supposed to be N127.075 billion, but only N77.075 billion was remitted, leaving an unaccounted balance of N50 billion.
The Auditor-General attributed these anomalies to weak internal control mechanisms within the organization.
The report warned that such practices could result in significant revenue loss, diversion of public funds, and potential mismanagement or misappropriation of funds.
These infractions reportedly occurred before the NNPC transitioned to its current status as the Nigerian National Petroleum Company Limited (NNPCL) in July 2022, when it was restructured to function as a commercial entity.
Despite the findings, the NNPCL has shown financial progress in recent years. In 2024, the company declared a N3.3 trillion net profit for the 2023 financial year in its Audited Financial Statement, marking a stark contrast to its historical lack of financial transparency. The company had previously released its financial reports in 2020 for the first time in 43 years.
As the audit report gains public attention, it underscores the need for stricter financial controls and greater accountability in one of Nigeria’s most critical revenue-generating institutions.