Forensic audit reveals N3.3trillion inflated figure in fuel subsidy

Forensic audit conducted by KPMG, a global accounting firm, has revealed a N3.3 trillion discrepancy in the fuel subsidy claims made by the Nigerian National Petroleum Company Limited (NNPCL) during the administration of former president Muhammadu Buhari.

The audit found that NNPCL inflated its fuel subsidy claims, initially reporting N6 trillion, with the government paying a substantial portion.

However, NNPCL’s Group CEO, Mele Kyari, claimed the company was still owed N2.8 trillion, which the federal government has yet to reimburse.

“Since the provision of the N6tn in 2022, and N3.7tn in 2023, we have not received any payment whatsoever from the Federation.

“That means they (the Federal Government) are unable to pay and we’ve continued to support this subsidy from the cash flow of the NNPC. We are waiting for them to settle up to N2.8tn of NNPC’s cash flow from the subsidy regime and we can’t continue to build this,” he said.

Kyari made the claim hours after the announcement by President Bola Tinubu that fuel subsidy had been removed.

The Nigerian Government has decided to conduct a fresh audit of the N2.8 trillion fuel subsidy claim, following KPMG’s reconciliation, which reduced the claims to N2.7 trillion.

The audit, covering 2015-2021, aims to verify the authenticity of NNPC’s claims.

The Office of the Auditor-General for the Federation (OAuGF) will lead the audit, with the option to engage an external firm for additional support.

The decision was made during a Federal Account Allocation Committee (FAAC) meeting in March 2024, where members discussed the need for an independent audit to prevent conflicts of interest.