March 2, 2024

NNPC Ltd spent 2.9 trillion on wages, entertainment, bank charges, running cost, others in one year

By Adebayo Obajemu

According to data from NNPC Ltd’s recently released audited financial report for 2022
the firm spent an estimated NN2.9 trillion on wages, entertainment, bank charges, running cost and others between September 2021 and December 2022, just as N1.2 trillion was spent on general and administrative charges for the 16 months period.
The report further showed that both NNPCL Group and the company spent a total of N872 billion on “other expenses” not clearly specified in the document.
While security expenses by the Group and the company stood at N532 billion, entertainment was N8.35 billion, employee benefit expenses, which include salaries, wages, allowances, pensions and gratuities, N373 billion and directors’ expenses N1.2 billion.

Office running costs gulped N1.8 billion, while management and facilitation fees took N295 million, donations N1.65 billion, and audit fees N2 billion while fines & penalties took N45 billion.
Other expenses include bank charges, N675 million; depreciation of other property, plants and equipment, N67.9 billion; depreciation of right of use asset, N1.3 billion; advertisement and publicity, N4.9 billion; legal and professional fees, N8.3 billion; printing and stationery, N57.5 billion; rents and rates, N35 billion; repairs and maintenance N219.9 billion; travelling and transport, N354.2 billion; minimum tax and levy, N15.65 billion, write-off of property, plant and equipment, N139.8 billion; postages and telephone, N3.46 billion among others.

This is even as Mele Kyari, group chief executive officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, clarified the non-remittance of $2 billion into the federation account as reported by the Nigeria Extractive Industries Transparency Initiative (NEITI).

NEITI, in its ‘2021 Oil and Gas Industry Report’, released in September 2023, had said NNPC did not remit $2 billion in taxes to the federal government in 2022.

But, reacting, Kyari, expressed disappointment with NEITI for going public with its report that NNPC failed to remit some monies into the federation account “instead of seeking clarification on any perceived gap in its assessment”.

According to a statement on Saturday by Olufemi Soneye, chief corporate communications officer, NNPC, Kyari made this known during a visit by a delegation from the Extractive Industries Transparency Initiative (EITI), in Abuja late last year.

He said NNPC was not holding any public funds back and what NEITI reported as non-remittance was what was due to the company as payment for taking the burden of fuel subsidy on behalf of the federal government.

Also, Kyari said NNPC would have published its audited financial statement (AFS) for 2022 since June 2023 but could not do so because it had no substantive board of directors at that time.

Speaking further, the GCEO said NNPC was a more reliable organisation as a result of its collaboration with EITI/NEITI.

Kyari, had last year said the federal government wàs still owing the firm the sum of N2.8 trillion spent on petrol subsidy.

“Today, we are waiting for them to settle up to N2.8 trillion of NNPC’s cash flow from the subsidy regime and we can’t continue to build this,” Kyari said.

The GCEO said since the provision of the “N6 trillion in 2022, and N3.7 trillion in 2023, we have not received any payment whatsoever from the federation”.

Kyari said the NNPC made the petrol subsidy payments from its cash flow, noting that the government has been unable to pay back the N2.8 trillion spent so far.

“That means they (the federal government) are unable to pay and we have continued to support this subsidy from the cash flow of the NNPC. That is, when we net off our fiscal obligations of taxes and royalties, there is still a balance that we are funding from our cash flow. And that has become very difficult and it is affecting our other operations,” he said.