A new audit by the Office of the Auditor-General has raised serious questions about the financial practices of the Nigerian National Petroleum Company Limited (NNPCL), uncovering more than $51 million in payments made under unclear or irregular circumstances.
The findings, captured in an 808-page report submitted to the National Assembly, highlight a pattern of weak documentation, contract violations, and payments that auditors say do not comply with federal financial regulations.
One of the biggest issues uncovered is NNPC’s failure to deduct mandatory stamp duty on transactions worth billions of naira and tens of millions of dollars. The company reportedly skipped required deductions on ₦24.7 billion and $52.98 million paid to contractors, a move auditors say denied the federal treasury significant revenue.
The audit also found a major overpayment of $22.84 million under the Direct Sales Direct Purchase (DSDP) scheme. Although NNPC insisted that crude and refined products were delivered, the records did not justify the amount paid, leading auditors to order a full recovery of the funds.
Another case involved a vessel-chartering contract that was renewed without proper board approval. Payments totaling $1.8 million were made during this period, with management blaming COVID-19 lockdown disruptions. Auditors rejected the explanation, saying the renewal violated financial rules.
Payments amounting to $2.01 million and ₦478.5 million under the Atlas Cove Depot Optimisation Project were also flagged. Auditors reported that no invoices, receipts, or proof of work were provided. NNPC argued that internal document codes were mixed up, but the response was dismissed as inadequate.
Further irregularities included $8.21 million for meter installations allegedly delivered to the wrong sites, $1.03 million paid to a company with no documented contract, and $1.93 million in inflated costs linked to vessel charters after an unexplained change of vessels at a higher rate.
In all cases, the Auditor-General instructed NNPC’s Group Chief Executive Officer to recover the questioned funds, remit outstanding taxes, and present evidence of compliance before the National Assembly’s Public Accounts Committee.
NNPC provided responses to the audit, but most were described as unsatisfactory. The report stresses that many of the issues stem from weak internal controls and poor record-keeping, exposing public funds to avoidable risks. With the oil sector remaining central to Nigeria’s economy, the findings deepen concerns about accountability within NNPCL.
