A renewed clash has erupted between the Nigerian National Petroleum Company Limited (NNPCL) and Periscope Consulting, the audit firm engaged by the Nigeria Governors’ Forum (NGF), over an alleged $42.37bn (₦12.91tn) oil revenue under-remittance to the Federation Account between 2011 and 2017, which highlights the NNPCL revenue shortfall.
The confrontation resurfaced in the Federation Account Allocation Committee (FAAC) post-mortem review for November 2025, which detailed fresh disagreements and triggered a directive for a joint reconciliation session.
NNPCL Rejects Audit Claim, Says No Revenue Is Outstanding
According to the FAAC document, NNPCL formally dismissed Periscope Consulting’s findings, insisting that all crude oil proceeds and statutory revenue were fully remitted during the review period and thus dismissing claims regarding NNPCL’s revenue shortfall.
Periscope Consulting countered, maintaining that its audit uncovered substantial discrepancies and that the alleged $42.37bn gap has not been resolved.
The conflicting submissions have resulted in a deadlock, prompting FAAC to order both parties to harmonise their records.
Why the Oil Revenue Controversy Matters
The renewed dispute is the latest in a long-running transparency battle between state governments and NNPCL.
In February 2025, FAAC suspended its monthly meeting over another ₦1.7tn revenue dispute, raising concerns about possible delays in federal allocations.
The Nigeria Governors’ Forum hired Periscope Consulting after repeatedly accusing NNPCL of opaque revenue practices, especially in:
- crude oil sales
- domestic crude allocations
- fuel subsidy deductions
- joint venture (JV) cash calls
- foreign exchange inflows
Although NNPCL is now corporatised under the Petroleum Industry Act (PIA), critics argue that structural opacity still affects its financial reporting and contributes to its revenue shortfall.
Expert Labels $42.37bn Shortfall a ‘Legacy Problem’
Energy economist and Professor Emeritus Wumi Iledare said the alleged under-remittance reflects the weaknesses of the pre-PIA NNPC structure.
He described the discrepancy as a “legacy problem,” citing overlapping regulatory and commercial roles that made revenue reconciliation difficult under the old framework.
Iledare recommended:
- strict implementation of the PIA
- real-time monitoring of oil revenue flows
- continuous independent audits
He said these steps are necessary to prevent future remittance disputes.
FAAC Queries NNPCL’s Frontier Exploration Fund Records
The FAAC Sub-Committee also raised concerns over NNPCL’s spending on the 30% Frontier Exploration Fund, which finances oil and gas exploration in frontier basins.
Although NNPCL submitted utilisation records covering 2008–2024, the committee noted that project-specific expenditure details were missing.
FAAC has requested a detailed breakdown linking each exploration project to the exact amount spent due to unresolved questions on NNPCL revenue shortfall.
₦2.03tn Outstanding Liabilities Under Review
FAAC documents also revealed that NNPCL owes ₦2.03tn in outstanding liabilities to the:
- Federal Inland Revenue Service (FIRS)
- Nigerian Upstream Petroleum Regulatory Commission (NUPRC)
The liabilities — accrued between June and December 2023 — include ₦1.19tn in royalties and ₦843.28bn in taxes.
These amounts are currently being reconciled by the Stakeholders Alignment Committee to address NNPCL revenue shortfall issues.
World Bank Flags Revenue Leakages, Partial Remittances
The World Bank has recently criticised NNPCL for persistent revenue leakages.
It stated that despite the removal of fuel subsidy in 2024, NNPCL remitted only ₦600bn of the ₦1.1tn generated from crude sales — leaving a ₦500bn gap.
The bank warned that incomplete remittances undermine:
- fiscal transparency
- macroeconomic stability
- effective revenue management
Reform Promises Persist, But Legacy Issues Remain
Since assuming office, NNPCL Group CEO Bayo Ojulari has pledged to strengthen transparency and accountability within the company.
However, legacy disputes such as the alleged $42.37bn under-remittance continue to cast a shadow over current reforms, keeping pressure on FAAC to resolve the revenue discrepancies and stabilise federal earnings, especially surrounding NNPCL revenue shortfall matters.