- Civil society groups demand sanctions and accountability as report details major infractions.
The Nigerian National Petroleum Company Limited (NNPCL) has been accused of diverting N2.68 trillion and $19.77 million over four years, according to a report by the Auditor-General of the Federation. The infractions, detailed in annual audit reports between 2017 and 2021, were submitted to the National Assembly and highlight constitutional violations and financial mismanagement.
Alleged Financial Infractions
The audit revealed unauthorized deductions, discrepancies in remittances, and opaque financial dealings by the NNPCL, including:
- N1.33 trillion in unauthorized deductions in 2017.
- N681.02 billion in financial discrepancies in 2019.
- N151.12 billion ($19.77 million) in unjustified deductions in 2020.
- N514 billion in unaccounted revenue in 2021.
The reports accuse the NNPCL of failing to remit full revenues to the Federation Account, in violation of Section 162(1) of the 1999 Constitution, which mandates that all government revenue must be paid into a central account for distribution among the three tiers of government.
In one instance, the NNPCL was reported to have deducted N1.33 trillion for joint venture cash calls from total revenue of N2.41 trillion in 2017, leaving only N1.07 trillion for remittance to the Federation Account.
Opaque Practices Persist
The audit highlighted systemic weaknesses in internal controls and a lack of transparency in the NNPCL’s operations. For example, the company reportedly deducted N82.95 billion from crude oil sales in 2020 and 2021 for refinery rehabilitation without proper authorization or evidence of expenditure.
The report also noted unaccounted-for crude oil losses, incomplete allocation records, and discrepancies in remittance figures. In 2019 alone, a shortfall of N663.89 billion was identified between NNPCL’s reported revenue and the Accountant-General’s records.
Calls for Accountability
Civil society groups have condemned the alleged financial misconduct. The Centre for Anti-Corruption and Open Leadership (CACOL) described the NNPCL as a “hub of institutional corruption,” accusing powerful interests within and outside government of shielding the company from scrutiny.
CACOL Executive Director, Debo Adeniran, criticized the Petroleum Industry Act for failing to ensure transparency in the NNPCL’s operations, despite its aim to unbundle and decentralize the corporation. He noted that the company has long been a “liquid enrichment” source for officials and remains resistant to anti-corruption investigations.
The Civil Society Legislative Advocacy Centre (CISLAC) also blamed President Bola Tinubu, the National Assembly, and security agencies for failing to ensure accountability. CISLAC Executive Director, Musa Rafsanjani, argued that the president bears the primary responsibility for enforcing transparency in the NNPCL, while lawmakers and security agencies must strengthen oversight and address crude oil theft and diversion.
Next Steps
The Auditor-General recommended immediate measures to recover unremitted funds and strengthen financial controls in the NNPCL. Civil society groups are calling for stronger political will to combat corruption in the oil sector and dismantle what they allege is a powerful cartel within the corporation.
As stakeholders await action from the government and legislature, the allegations against the NNPCL raise fresh concerns about the management of Nigeria’s oil wealth and its impact on the country’s economic stability.
