Why we can’t explain billions of dollars in oil audit queries – Finance Ministry
The Federal Ministry of Finance on Thursday explained why it could not immediately respond to audit queries involving billions of dollars contained in the 2021–2023 Oil and Gas Sector Audit Report published by the Nigeria Extractive Industries Transparency Initiative (NEITI). Appearing before the Senate Committee on Public Accounts, which is probing the report, the Permanent […]
The Federal Ministry of Finance found itself unable to provide immediate answers to audit inquiries totaling billions of dollars, as outlined in the 2021-2023 Oil and Gas Sector Audit Report released by Nigeria Extractive Industries Transparency Initiative (NEITI). During a Senate Committee on Public Accounts hearing, the Ministry's Permanent Secretary, Mr. Raymond Omachi, pointed fingers at the Nigerian National Petroleum Company Limited (NNPCL) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for failing to furnish essential financial records.
The NEITI report pointed out multiple financial inconsistencies that the ministry struggled to resolve due to the lack of cooperation from the oil sector agencies. One major issue was the unaccounted recovery of a $3 billion pre-export financing loan from 2012, used to cover fuel subsidy payments, under the pre-export financing and Project Eagle agreements.
The report also disclosed that in 2021, Nigeria Liquefied Natural Gas (NLNG) had paid $722.6 million in dividends and interest to NNPCL, but these funds were not dispersed to the Federation Account or recorded appropriately. Additionally, the report questioned the expenditure of over N200 billion on the country's refineries in 2021, even though none were functional at the time.
Omachi emphasized that the Ministry of Finance did not directly oversee these day-to-day transactions, and the required financial records from NNPCL and NUPRC were absent. To facilitate reconciliation, the Ministry has enlisted the services of an external audit firm. Omachi appealed to the Senate to employ its statutory authority to force the heads of NNPCL and NUPRC to testify before the committee.
The committee's Chairman, Senator Ibrahim Hassan Dankwambo, instructed the Ministry to organize a joint reconciliation session with NNPCL, NUPRC, and other pertinent agencies, stressing that these discrepancies could have global repercussions for Nigeria's economic standing.
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