Nigeria’s Office of the Auditor-General for the Federation has uncovered a minimum of four financial infractions amounting to N514 billion in the operations of the Nigerian National Petroleum Company Limited, NNPCL, in the 2021 financial year.

This was disclosed in an audit report of non-compliance and internal control weaknesses in the MDAs for the 2021 financial year, recently cited by our correspondent.

A breakdown of the infractions includes irregular deductions worth N343.64 billion from domestic crude sales at source and warehousing of N83.66 billion from the federation’s miscellaneous income in a sinking fund account.

Also, there are unauthorised deductions of N82.95 billion from the federation revenue for refinery rehabilitation and the unsubstantiated payment of N3.75 billion for the sale of petrol.

The OAuGF said the flagged infractions in NNPC’s dealings in the said period violated the Constitution of the Federal Republic of Nigeria and the 2009 Act of Financial Regulations.

The report read, “Audit observed from the review of NNPC SAP payment record for March and May 2021 payments that the sum of N484.73bn was the gross amount generated for the sale of domestic crude for the months of March and May 2021.

“The sum of N343.64bn from the gross amount was unilaterally deducted from the gross domestic crude sales as NNPC Value shortfall, Strategic Stock Holding Cost, Crude Oil and Products Pipeline Losses, as well as the pipelines maintenance and management costs.

“The details of each of the cost components deducted were not provided for audit review. Hence, the reasons for the deductions could not be justified by the management.

“In the month of May, the net payable that could have been remitted ought to have been N127.075bn, but only the sum of N77.075bn was remitted, leaving an unremitted balance of N50bn to the Federation Account, which has remained unaccounted for.

“The above anomalies could be attributed to weaknesses in the internal control system at NNPC, now NNPC Ltd. This is a potential loss of Federation revenue, diversion of public funds, or misapplication or misappropriation of funds.”

The infractions took place before NNPC was rebranded to Nigerian National Petroleum Company Limited, NNPCL, in July 2022 to operate as a commercial entity.

In 2024, NNPCL released its Audited Financial Statement, where it declared a N3.3 trillion net profit for the 2023 financial year.

This comes after the financial reports were released in 2020 for the first time in 43 years.