The Federation Account Allocation Committee (FAAC) has launched an investigation into the actions of the Nigerian National Petroleum Corporation (NNPC) Limited regarding Nigerian Liquified Natural Gas (NLNG) profits. A committee is reviewing payments related to subsidies, taxes, royalties, and other transactions in comparison to the amounts received or paid. The NLNG paid a dividend of $275 million, of which $220 million was utilized to settle the nation’s subsidy obligation. However, NNPC withheld $55 million, which is now under scrutiny by the FAAC.
Key Points:
- The FAAC is probing the Nigerian National Petroleum Corporation (NNPC) Limited’s handling of Nigerian Liquified Natural Gas (NLNG) profits, specifically focusing on payments related to subsidies, taxes, royalties, and other transactions.
- The NLNG paid a dividend of $275 million, with $220 million allocated to settle the nation’s subsidy obligation. However, NNPC withheld $55 million, which has raised questions.
- An ad hoc committee was established to oversee the investigation. The committee has requested information from NNPC on dividends earned from NLNG activities but has not received a response thus far.
- Financial details regarding dividends credited to the Federation Account were disclosed during the FAAC meeting in August. NNPC Ltd declared an estimated interim dividend payment of N81.17 billion to be disbursed to the Federation Account.
- Additionally, NLNG had a $158.17 million dividend payable to the Federation Account.
- Reconciliation of sums related to domestic products in Nigeria to the Federal Inland Revenue Service and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is underway. This includes Joint Venture (JV) Royalty, PSC Royalty, and JV and PSC taxes on domestic products.
Analysis: The investigation by the Federation Account Allocation Committee (FAAC) into NNPC’s handling of NLNG profits reflects a commitment to transparency and accountability in Nigeria’s economic dealings. The focus on subsidies, taxes, and royalties ensures that financial transactions are thoroughly examined for compliance and fairness. The withholding of $55 million by NNPC has raised concerns, and this inquiry seeks to address any discrepancies. The FAAC’s diligence in this matter demonstrates a dedication to responsible financial management and governance in the energy sector.
