OAuGF Uncovers ₦514bn Financial Infractions In NNPCL’s 2021 Financial Operations 

The Office of the Auditor-General for the Federation (OAuGF) has uncovered financial irregularities amounting to ₦514 billion in the 2021 financial operations of the Nigerian National Petroleum Company Limited (NNPCL).

The findings were detailed in the 2021 Audit Report on Non-Compliance and Internal Control Weaknesses in ministries, departments, and agencies (MDAs) and highlighted significant breaches of fiscal regulations and financial mismanagement.

The report revealed irregular deductions totalling ₦343.64 billion from domestic crude oil sales, which were unilaterally carried out under various cost labels, including value shortfall, strategic stock holding costs, pipeline losses, and maintenance. These deductions lacked adequate supporting documentation, raising concerns about accountability. Additionally, ₦83.66 billion from the federation’s miscellaneous income was warehoused in a sinking fund account without proper authorisation, further complicating the transparency of the financial processes.

Another significant infraction was the unauthorised deduction of ₦82.95 billion from the federation’s revenue, purportedly for refinery rehabilitation, without any clear approval or supporting records. Similarly, ₦3.75 billion was flagged as an unverified payment tied to petrol sales transactions, with no substantiating evidence to justify the expenditure.

The audit report observed that in March and May 2021, NNPC Ltd generated ₦484.73 billion in gross revenue from domestic crude sales. Out of this amount, ₦343.64 billion was deducted without explanation. In May 2021 alone, while ₦127.075 billion was expected to be remitted to the Federation Account, only ₦77.075 billion was actually transferred, leaving a shortfall of ₦50 billion that remains unaccounted for.

The Auditor-General criticised the weak internal controls within the corporation, attributing the anomalies to poor oversight, which created vulnerabilities for potential mismanagement, misappropriation, or diversion of public funds.

These financial irregularities occurred before the transformation of NNPC into NNPC Limited (NNPCL) in July 2022, when it began operating as a commercial entity under the Petroleum Industry Act (PIA). In recent efforts towards transparency, NNPCL published its Audited Financial Statement for the 2023 financial year, declaring a net profit of ₦3.3 trillion. This milestone followed its historic decision to release financial statements in 2020 for the first time in 43 years.