Fresh Dispute Deepens as Governors vs NNPC Clash Over Remittance Audit
A renewed standoff has emerged between the Nigeria Governors’ Forum (NGF) and the Nigerian National Petroleum Company Limited (NNPCL) over an alleged $42.37bn oil revenue under-remittance to the Federation Account, covering the period between 2011 and 2017.
The controversy, which has simmered for years, resurfaced following fresh exchanges contained in the Federation Account Allocation Committee’s (FAAC) post-mortem review for November 2025.
According to the report obtained on Tuesday, FAAC has now mandated a joint reconciliation session involving NNPCL and Periscope Consulting, the audit firm engaged by the NGF, to harmonise conflicting records and determine whether the alleged multibillion-dollar shortfall actually exists.
The lingering dispute places pressure on Nigeria’s already fragile revenue system, threatening fiscal stability across federal, state, and local government tiers.
Background to the Governors vs NNPC Revenue Crisis
The revived conflict traces back to an extensive audit commissioned by the NGF, after several states complained about persistent discrepancies in NNPCL’s remittance patterns.
The audit, conducted by Periscope Consulting, alleged that the national oil company failed to remit $42.37bn (about N12.9tn) in crude oil proceeds, domestic sales, statutory allocations, and other revenue streams due to the Federation Account within the six-year period reviewed.
In October 2024, ireport247news.com reported that the reconciliation exercise involving NNPCL and other revenue-generating agencies was extended by an additional year due to unresolved inconsistencies. Despite multiple submissions, both sides had failed to reach a unified position.
But in the latest FAAC post-mortem report, the situation has escalated, with each party presenting strongly conflicting positions.
NNPCL Rejects Allegations Amid Rising Governors vs NNPC Tensions
In its formal response to FAAC, NNPCL dismissed the allegations and insisted that all revenues due to the Federation were duly accounted for. It described Periscope’s findings as inaccurate and inconsistent with its audited books.
The company maintained that revenue from crude oil lifting, domestic allocation, JV operations, and all associated earnings had been remitted in line with statutory requirements.
Periscope, however, rejected NNPCL’s defence, insisting that its audit uncovered substantial gaps in remittances, and that the alleged deficit remains unresolved.
According to the consulting firm, NNPCL’s explanations did not reconcile with data obtained from official export, lifting and revenue records.
FAAC’s Sub-Committee, acknowledging the sharp disagreement, directed the two parties to hold a joint session to “close out” the matter—a process which it confirmed is still ongoing.
A Long History of Transparency Concerns
The Governors vs NNPC dispute is not new. In February 2025, the conflict reached a peak when FAAC suspended its monthly meeting after states accused NNPCL of failing to fully remit an estimated N1.7tn in revenue, delaying allocations crucial for budget execution.
Over the years, states have repeatedly queried the opacity surrounding:
Crude oil sales
Domestic crude allocation
Subsidy deduction practices
JV cash call handling
Exchange rate variations on oil proceeds
With oil receipts forming the backbone of FAAC inflows, any inconsistency directly threatens state payrolls, capital projects, and local government operations.
NNPCL, now operating under the Petroleum Industry Act (PIA) as a commercial entity, maintains that many independent audits do not fully understand the commercial and regulatory frameworks that guide its operations.
Expert: Under-Remittance Claims Are a “Legacy Problem”
Commenting on the issue, Professor Wumi Iledare, Professor Emeritus of Petroleum Economics, described the dispute as a remnant of Nigeria’s old petroleum governance system.
He said the alleged under-remittance from the 2011–2017 period reflected systemic weaknesses in the pre-PIA regime.
He noted that the former Nigerian National Petroleum Corporation operated under overlapping roles as regulator, operator, and revenue custodian, making revenue reconciliation cumbersome and prone to dispute.
Iledare advised that full implementation of the PIA, coupled with real-time monitoring and continuous independent audits, is the only sustainable way to prevent future remittance conflicts.
Fresh Scrutiny on Frontier Exploration Fund
The FAAC post-mortem review also revealed gaps in NNPCL’s reporting on the 30 per cent Frontier Exploration Fund, a statutory allocation for oil and gas exploration in frontier basins.
While NNPCL submitted utilisation data from 2008 to 2024, the committee noted the absence of project-specific details.
FAAC has now requested a comprehensive breakdown linking each exploration activity to actual expenditure—a reconciliation still pending.
Outstanding Tax and Royalty Liabilities Under Review
The Sub-Committee also reviewed outstanding liabilities owed by NNPCL to the Federal Inland Revenue Service (FIRS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), amounting to N2.03tn between June and December 2023.
These liabilities are now part of a broader reconciliation being handled by the Stakeholders Alignment Committee.
World Bank Raises Red Flag
Adding international scrutiny, the World Bank recently accused NNPCL of not fully remitting oil revenues, alleging significant leakages that undermine Nigeria’s fiscal stability.
According to its assessment:
NNPCL remitted only 50 per cent of post-subsidy revenue gains
Out of N1.1tn crude-related revenue in 2024, N600bn reached the Federation Account
The remainder was allegedly used to offset past arrears
The bank urged the government to strengthen oversight and enforce full transparency in oil revenue management.
The intensifying Governors vs NNPC dispute underscores unresolved structural issues in Nigeria’s revenue governance systems.
With states depending heavily on FAAC allocations amid rising inflation and shrinking real revenue, the outcome of the reconciliation process could significantly influence Nigeria’s fiscal outlook heading into 2026.
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