Imported Petrol: NEITI Report Uncovers over 5.13bn Litres Discrepancy in NNPC, NMDPRA Records in 2 Years

Emmanuel Addeh in Abuja

A new report by the Nigeria Extractive Industries Transparency Initiative (NEITI) has uncovered discrepancies in figures of imported petrol given by Nigeria’s state oil firm, the Nigerian National Petroleum Company Limited (NNPC) and one of the industry regulators, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

A THISDAY review of the combined 2022/2023 Oil and Gas Industry report indicated that the difference in numbers churned out by the NNPC and the NMDPRA was as high as 5.13 billion litres for both years.

While the regulator said 3.29 billion litres were imported in 2022, the NNPC data, according to the NEITI document, showed that 6.30 billion litres were brought into the country. This was about 92 per cent discrepancy.

In addition, in 2023, while the NMDPRA records showed 6.02 billion litres were imported, the NNPC records indicated that 3.9 billion litres were imported, a variance of 2.12 billion litres or 35 per cent difference in records.

However, NEITI stated that the issue is currently under review in an audit commissioned by the federal government through the Federal Ministry of Finance, which it said is focused on examining price differentials for Premium Motor Spirit (PMS) to verify NNPC’s claims.

In contrast, the NNPC has recently accused the federal government of owing it trillions of naira in fuel import subsidy.

But NEITI in its latest report urged the NMDPRA to conduct continuous ante-mortem independent and third-party audits of imported petroleum quantities and landing costs at the point of discharge to avoid altercations over actual imported petrol.

These audits, it stressed, should also advise the Debt Management Office (DMO) on price differentials and under-recovery claims of NNPC, similar to practices followed during the operation of the defunct PPPRA.

“In the first instance, NMDPRA records show 3.29 billion litres of PMS importation for NNPC Limited while NNPC Limited record showed 6.30 billion litres for product importation in 2022, a variance of 3.01 billion. litres (92 per cent).

“Furthermore, this was observed in 2023, NMDPRA records show 6.02 billion litres and NNPC Limited records shows 3.9 billion litres, a variance of 2.12 billion litres (35 per cent),” the report said.

The downstream and midstream regulator, the report recommended, should implement mechanisms for near real-time tracking of petroleum product consumption nationwide in alignment with the relevant sections of the Petroleum Industry Act (PIA).

The practice of classifying petroleum products at the point of discharge as consumption should be discontinued, the transparency initiative said, noting that further intentional efforts should be instituted to track and report actual consumption.

“In another instance, NNPC Limited valuation record shows PMS importation of 22.93 billion litres valued at N7.39 trillion in 2022 and 14.53 billion litres valued at N6.74 trillion in 2023,” the report pointed out.

According to the document, the Independent Assessment (IA) observed no significant revenue from the implementation of several recommendations from the 2021 oil and gas sector report.

“NMDPRA should implement mechanisms for near real-time tracking of petroleum product consumption nationwide. This initiative should align with the relevant sections of the PIA.

“The practice of classifying petroleum products at the point of discharge as consumption should be discontinued. And further intentional efforts should be instituted to track and report actual consumption,” the report said. The review of policy trade- offs, it said, remains inadequately addressed.

The observed that NNPC limited was yet to address data synchronisation issues, urging the company to improve data management processes and establish controls to prevent future discrepancies.

“NNPC should ensure regular monitoring, and data reconciliation to mitigate recurrence of discrepancies among NNPC Limited business. For instance, aggregated total crude sales revenue determined by the 2022-2023 NEITI extractive reporting was N10.284 trillion as against crude oil sales revenue of N12.026 trillion stated in the 2023 audited financial statements of NNPC Limited. A variance of N1.742 trillion or 17 per cent,” the Dr Ogbonnaya Orji-led organisation stated.

The report also reviewed NNPC’s miscellaneous revenue figures, which were $17.487 million in 2023 and $4.279 million in 2022 in contrasts with the figures for 2021, which were $702.19 million and N343.56 million.

The report finds that the basis for the miscellaneous revenue disclosed by NNPC Limited remains unclear. This lack of clarity is concerning, as it does not align with international best practices typically observed in the oil and gas sector.

“Improved transparency and adherence to established practices are needed to ensure that miscellaneous revenues are accurately reported and understood.

“NNPC Limited should provide a detailed breakdown of miscellaneous revenue sources and align reporting practices with international standards, such as International Financial Reporting Standards (IFRS), to ensure transparency comparability.

“Comprehensive disclosure in financial statements, including explanatory notes, will enhance clarity and stakeholder trust,” the report said.