Governors, NNPC clash deepens over alleged $42bn oil revenue gap

Tensions have escalated between the Nigerian National Petroleum Company Limited (NNPCL) and Periscope Consulting, the audit firm hired by the Nigeria Governors’ Forum, following renewed disagreements over an alleged $42.37bn (₦12.9tn) shortfall in oil revenue remittances to the Federation Account between 2011 and 2017.

Fresh documents from the Federation Account Allocation Committee’s November 2025 post-mortem review, obtained on Tuesday, reveal that both parties remain locked in a heated dispute, prompting FAAC to order a joint reconciliation meeting to resolve the long-running controversy.

The Governors’ Forum had commissioned Periscope Consulting after alleging that NNPCL withheld crude oil proceeds, statutory earnings, and other inflows due to the Federation Account under the old NNPC regime. But the national oil company has now formally dismissed the audit report, insisting it owes no outstanding revenue for the period under scrutiny.

“NNPC Limited responded that all revenues due to the Federation have been properly accounted for,” FAAC disclosed.

Periscope, however, disputes this claim, maintaining that its audit uncovered significant gaps that remain unresolved.

FAAC Intervenes as Stalemate Persists

The FAAC Sub-Committee, in its review, noted the sharply divergent positions, ordering both parties to meet and harmonise their figures.

“Periscope Consulting disagreed with NNPCL’s position; hence, the Sub-Committee directed that there should be a joint meeting… This assignment is work in progress,” the report said.

The impasse marks another chapter in the strained relationship between state governments and the now-commercialised national oil company, especially over transparency in oil revenue reporting.

Earlier in February 2025, FAAC’s monthly meeting was suspended over a similar dispute involving an estimated ₦1.7tn in unremitted revenues.

Experts Say Dispute Reflects ‘Legacy Failures’ of Pre-PIA System

Speaking on the intensifying standoff, renowned petroleum economist Prof. Wumi Iledare fold Punch that the alleged under-remittance as a symptom of long-standing governance weaknesses in the pre-Petroleum Industry Act era.

“The old NNPC had overlapping roles that made reconciliation difficult and prone to disputes,” he said, adding that only disciplined implementation of the PIA, real-time monitoring, and continuous independent audits can prevent future controversy.

Questions Over Frontier Exploration Fund

FAAC’s review also raised new concerns about NNPCL’s handling of the 30% Frontier Exploration Fund. Although the company submitted utilisation records covering 2008–2024, the committee said the documents lacked project-level details, forcing it to request a more granular breakdown.

The committee is awaiting an updated submission from NNPCL.

₦2.03tn in Outstanding Tax, Royalty Liabilities Under Review

FAAC further flagged ₦2.03tn in unpaid liabilities owed by NNPCL to the Federal Inland Revenue Service and Nigerian Upstream Petroleum Regulatory Commission between June and December 2023. The sum, comprising ₦1.19tn in royalties and ₦843.28bn in taxes, is now being reconciled by the Stakeholders Alignment Committee.

World Bank Accuses NNPCL of Revenue Leakages

Adding to the pressure, the World Bank criticised NNPCL for failing to fully remit oil proceeds, saying the company still retains excessive control over crude sales and forex inflows despite its 2021 corporatisation.

According to the bank, only 50% of post-subsidy revenue gains from petrol sales have reached the Federation Account – about ₦600bn out of a reported ₦1.1tn in 2024 – leaving a deficit of ₦500bn.

Since assuming office, NNPCL GCEO Bayo Ojulari has repeatedly vowed to institute transparency and efficiency. But the persistence of historical revenue discrepancies, some dating back over a decade, continues to cast a shadow over the company’s reform agenda.