Fresh tension has emerged between the Nigerian National Petroleum Company Limited (NNPCL) and Periscope Consulting, the audit firm engaged by the Nigeria Governors’ Forum (NGF), over an alleged under-remittance of 42.37 billion dollars (about N12.91 trillion) into the Federation Account between 2011 and 2017.

The development followed new submissions by both parties, which prompted the Federation Account Allocation Committee (FAAC) to order a joint reconciliation session in an effort to determine the accurate revenue position and resolve the longstanding disagreement.

The review recalled that FAAC had in October extended the ongoing investigation into remittances by revenue-generating agencies, including NNPCL, to December 2024 due to persistent discrepancies in crude proceeds and statutory payments.

According to the committee, the audit undertaken by Periscope Consulting on behalf of the NGF alleged that NNPCL failed to remit crude oil sales and other earnings totalling 42.37 billion dollars during the six-year period.

However, in its latest response, the national oil company dismissed the allegation, insisting that all revenues due to the Federation Account had been fully remitted.

FAAC disclosed that NNPCL rejected the findings of Periscope Consulting, arguing that there were no outstanding payments for the period under review.

“The NNPC Limited submitted its response regarding the alleged 42,373,896,555.00 dollars under-remittance to the Federation Account as contained in the report of Periscope Consulting. The company responded that all revenues due to the Federation have been properly accounted for,” the committee stated.

But the consulting firm maintained its earlier position, insisting that its audit revealed significant gaps and unresolved revenue shortfalls.

FAAC said the conflicting positions had resulted in a stalemate, adding that its sub-committee directed NNPCL and Periscope Consulting to hold a joint session to harmonise records and conclude the assignment, which it noted is still ongoing.

The dispute marks the latest in a series of disagreements between state governments and NNPCL over oil revenue transparency. In February, FAAC suspended its monthly meeting after disagreements over an estimated N1.7 trillion in payments.

The NGF had, in response to concerns over remittance practices, contracted Periscope Consulting to review NNPCL’s handling of crude sales, domestic allocation, subsidy deductions and joint-venture cash calls.

Analysts say the alleged shortfall poses financial risks to cash-strapped state governments whose budgets depend significantly on monthly FAAC inflows.

Although NNPCL has repeatedly claimed improvements in accountability following its transition to a limited liability company under the Petroleum Industry Act (PIA), governance groups say persistent audit gaps continue to undermine public confidence.

A Professor Emeritus of Petroleum Economics, Wumi Iledare, told that the controversy reflects flaws associated with the pre-PIA structure of the former Nigerian National Petroleum Corporation.

He described the alleged under-remittance as a “legacy challenge”, attributing recurring reconciliation disputes to overlapping operational and regulatory roles under the defunct framework.

“The alleged 42.37 billion dollars under-remittance simply reflects the weaknesses of the old system. The former NNPC had overlapping roles that made reconciliation difficult and prone to disputes. The way forward is disciplined implementation of the PIA and improved real-time monitoring,” he said.

Meanwhile, FAAC said its Post-Mortem Sub-Committee also queried NNPCL over gaps in its reporting of the 30 per cent Frontier Exploration Fund, a statutory deduction for exploration activities in frontier basins.

It said although NNPCL submitted utilisation records covering 2008 to 2024, the documentation lacked project-specific breakdowns. The committee noted that it has written to the company requesting details linking each exploration project to expenditure and is awaiting its response.

The committee further identified outstanding liabilities owed by NNPCL to the Federal Inland Revenue Service and the Nigerian Upstream Petroleum Regulatory Commission between June and December 2023. The liabilities, estimated at N2.03 trillion, have been incorporated into an ongoing reconciliation process being coordinated by the Stakeholders Alignment Committee.

Data in the FAAC report indicated that NUPRC royalties accounted for N1.19 trillion of the outstanding amount, while FIRS taxes totalled N843.28 billion.

In a separate assessment, the World Bank faulted NNPCL for alleged failure to fully remit oil revenue to the Federation Account. It said despite the removal of the Premium Motor Spirit subsidy in October 2024, the company remitted only 600 billion naira out of an estimated 1.1 trillion naira revenue for 2024, leaving a gap of 500 billion naira.

The bank said NNPCL still maintains monopolistic control over crude sales, which it argued contributes to revenue leakages and fiscal instability.

Since assuming office, the NNPCL Group Chief Executive Officer, Bayo Ojulari, has pledged to deepen transparency and strengthen financial disclosure, insisting that the company is committed to full compliance with remittance rules.

Despite these assurances, FAAC, state governments and international institutions say unresolved legacy issues continue to cast doubt on remittance practices.