This info comes from documents shared by the Federal Accounts Allocation Committee after their January 2025 meeting on Wednesday.
The withheld amount, which spans from 2012 to 2024, has had a major effect on the Federation Account, the main fund pool that the government uses to distribute resources to federal, state, and local governments throughout the country.
Documents from the Federation Accounts department show a widening gap between what the NNPCL should have paid and what actually made it into the Federation Account.
The national oil company reported transactions totaling N27.28 trillion as payable from domestic crude sales during this period. However, only N13.524 trillion made it into the Federation Account, resulting in a hefty shortfall of N13.763 trillion, which is putting more financial pressure on the government.
The report also pointed out that N4.026 trillion was marked as certified subsidy claims, a persistent issue in the country’s oil industry.
This withheld revenue raises serious questions about transparency, accountability, and financial management at the national oil company. Recently, the Auditor-General of the Federation accused the NNPCL of misappropriating N2.68 trillion and $9.77 million over the past four years.
According to annual financial statements published between 2017 and 2021, N1.33 trillion was diverted in 2017, N681.02 billion in 2019, N151.12 billion ($19.77 million) in 2020, and N514 billion in 2021, totaling N2.68 trillion and $19.77 million over four years.
On Tuesday, the Senate decided to investigate the company regarding the N8.4 trillion it allegedly withheld for expenses related to subsidies on petroleum products.
The House of Representatives Public Accounts Committee has kicked off an investigation into the Nigerian National Petroleum Company Limited and oil companies for their outstanding debts, which total a whopping $1.6 billion in royalties owed to the Federation Account.
Additionally, a report from the Nigeria Extractive Industry Transparency Initiative has accused the NNPCL of not paying N3.6 trillion in taxes to the government.
Looking at the FAAC documents year by year, in 2012, the company didn’t pay N1.42 trillion but did contribute N1.54 trillion to the federation account. In 2013, they paid N1.58 trillion but withheld N1.043 trillion. The following year, they remitted N1.359 trillion while holding back N1.17 trillion.
In 2015, they paid N768.94 billion to the government but withheld N586.06 billion. The unremitted amount dropped to N183.58 billion in 2016, with N1.18 trillion sent to the government for distribution among the three tiers of government.
In 2017, the corporation held back a significant N430.62 billion from its earnings but still managed to remit a solid N1.305 trillion to the government. This pattern of withholding various amounts while still making substantial payments to the federal government became a recurring theme.
By 2018, the withheld amount jumped to N811.22 billion, yet the NNPCL contributed an even larger N1.48 trillion to the government. The trend peaked in 2019 with N703.45 billion withheld, while the corporation still sent N1.44 trillion to the federation account.
As the years went on, the amounts being withheld started to rise more sharply. In 2020, N298.06 billion was withheld, which was relatively lower compared to the previous years.
However, the amount paid was still at N1.21tn, showing that the corporation could manage to pay despite facing some internal issues. Things took a turn for the worse in 2021 when a whopping N1.94tn was held back, indicating either rising financial strains or a shift towards more strategic financial practices. In the end, only N789.03bn made it to the government.
Fast forward to 2022, and the NNPCL withheld an eye-popping N4.16tn, a figure that dwarfed previous years. The total amount paid to the government plummeted to just N245.83bn, signaling a serious financial squeeze.
In 2024, the company managed to pay N190.48bn into the federation account but held back N256.27bn. Attempts to get some clarity on the NNPCL's plans to address this situation were unsuccessful, as spokesperson Femi Soneye didn’t reply to messages sent to his WhatsApp.
Analysts are worried about how this could affect the Federal Government's ability to stick to its budget, as well as the financial health of state and local governments.
As the government struggles with economic issues, the NNPCL's decision to withhold such a large amount highlights the urgent need for reforms in the oil sector to ensure that revenues are accurately reported and fully paid into the Federation Account.
Commenting on these issues, the Centre for Anti-Corruption and Open Leadership in a recent interview with The PUNCH called the NNPCL a center of institutional corruption, claiming that powerful figures both inside and outside the government have protected the organization from being held accountable.
CACOL’s Executive Director, Debo Adeniran, expressed disappointment that even with the Petroleum Industry Act aimed at decentralizing and breaking up the NNPCL, the company’s operations remain unclear and filled with corruption allegations.
Adeniran points out that the NNPCL has long been a cash cow for government officials, even before it became a limited liability company. The way the NNPCL operates has always been pretty secretive. The Petroleum Industry Act hasn’t really changed that. Despite all the talk about decentralizing and breaking up the NNPCL, nothing significant has happened.
It’s like the most powerful group in Nigeria, with key players in the government and various agencies working closely with those in charge of NNPCL’s finances, likely due to some sort of kickbacks. Even the anti-corruption agencies struggle to investigate the NNPCL. The ICPC and EFCC have tried in the past, but they haven’t managed to find anything. Adeniran suggests there’s something protecting the NNPCL from being exposed for its corrupt activities.
Even the anti-corruption agencies find it difficult to probe the NNPCL. A couple of attempts were made by the ICPC and EFCC in the past, but they have not been able to uncover anything. There must be something shielding the NNPCL from exposure for its corruption crimes, Adeniran said.