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Governors vs NNPC: Tension rise over alleged $42bn oil revenue shortfall

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A renewed clash has emerged between the Nigerian National Petroleum Company Limited and Periscope Consulting, the audit firm hired by the Nigeria Governors’ Forum to examine an alleged under remittance of oil revenue totalling $42.37bn (about N12.91tn) to the Federation Account between 2011 and 2017.

The dispute, revived by fresh submissions from both sides, has forced the Federation Account Allocation Committee to mandate a joint reconciliation session to determine the true state of remittances and resolve the long-running impasse.

This was disclosed in the Federation Account Allocation Committee’s post-mortem review for November 2025, which detailed fresh exchanges between both parties over the alleged unremitted fund. The document was obtained by our correspondent on Tuesday.

Recall that in October, The PUNCH reported an extension of the ongoing probe and reconciliation of payments made by revenue-generating agencies, including the Nigerian National Petroleum Company Limited, to December 2024, following unresolved discrepancies in remittances. It also examined allegations that NNPC Limited failed to remit $42.37bn (about N12.9tn) in oil revenue to the Federation Account during the 2011–2017 period.

The review follows findings by Periscope Consulting, a firm engaged by the Nigeria Governors’ Forum, which had earlier accused the state oil company of withholding crude oil proceeds and other statutory revenues due to the Federation Account during the period.

But in the new document, the FAAC Sub-Committee confirmed that NNPCL had formally rejected the audit findings, insisting that no outstanding revenue is owed to the Federation Account for the period under review. The national oil company maintained that all crude oil proceeds and associated earnings were fully accounted for, disputing Periscope’s claims of significant underpayment.

But Periscope Consulting flatly disagreed with NNPC Limited’s defence, maintaining that its audit uncovered substantial gaps in remittances and that the alleged $42.37bn shortfall remained unresolved.

The report read, “UPDATE ON NNPC’S ALLEGED UNDER REMITTANCES TO FEDERATION ACCOUNT OF $42,373,896,555.00.

“NNPC Limited submitted their response regarding $42,373,896,555.00 under remittance to the Federation Account as contained in the report of Periscope Consulting. Recall that Periscope Consulting was the Consultant engaged by the Governors’ Forum to examine NNPC Limited under remittance to the Federation Account.

“NNPC Limited responded that all revenues due to the Federation have been properly accounted for and no outstanding amounts for the period under review.”

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This disagreement has pushed both sides into a stalemate, with the consultants accusing the oil company of providing explanations that do not reconcile with the audited data.

The FAAC sub-committee, noting the conflicting positions, directed that NNPCL and Periscope Consulting must meet jointly to harmonise records and “close out” the matter. It added that the reconciliation process remains ongoing.

“Responding, Periscope Consulting disagreed with NNPCL’s position; hence, the Sub-Committee directed that there should be a joint meeting with the two parties to close out on the issue. This assignment is work in progress,” it added.

The controversy marks the latest chapter in a prolonged dispute between state governments and the national oil company over transparency in oil revenue flows. In February 2025, FAAC suspended its monthly meeting due to a dispute between state governments and NNPC Limited over outstanding remittances.

The dispute over an estimated N1.7tn in revenues raised concerns over potential delays in revenue disbursement to states, which rely on FAAC allocations for budgetary commitments.

The Governors’ Forum commissioned Periscope Consulting amid complaints that NNPCL’s remittance practices, including handling of crude sales, domestic allocation, subsidy deductions, and JV cash calls, were opaque and inconsistent with expected inflows.

With oil receipts forming the backbone of FAAC disbursements, any alleged shortfall threatens state and local government finances, already strained by rising inflation and shrinking real revenue.

NNPC Limited, now operating as a limited liability company under the Petroleum Industry Act, has consistently defended its processes, claiming improved accountability and asserting that independent audits often misinterpret commercial and regulatory procedures governing its operations.

The latest face-off underscores deepening mistrust on both sides and places renewed pressure on FAAC to reconcile the books in the interest of fiscal stability.

Commenting on the issue, renowned Professor Emeritus of Petroleum Economics, Wumi Iledare, said the alleged $42.37bn under-remittance recorded between 2011 and 2017 reflects long-standing flaws in Nigeria’s pre–Petroleum Industry Act regime.

According to him, the former Nigerian National Petroleum Corporation operated with overlapping roles that made revenue reconciliation cumbersome and frequently disputed. Iledare described the controversy as a “legacy problem,” stressing that similar discrepancies can be avoided only through disciplined implementation of the PIA, real-time monitoring, and continuous independent audits.

He added that with transparent data and clear fiscal rules, future remittance disputes should not recur. Speaking in an interview, he said, “The alleged $42.37bn under-remittance from 2011–2017 simply reflects the weaknesses of the old pre-PIA system. The former NNPC had overlapping roles that made revenue reconciliation difficult and prone to disputes.

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“The lesson is clear: fully implement the PIA, strengthen real-time monitoring, and enforce continuous independent audits. With transparent data and clear rules, issues like this should not arise again. It is a legacy problem. The future depends on disciplined implementation of the PIA.”

The Post-Mortem Sub-Committee further queried the NNPC Limited over gaps in its reporting on the utilisation of the 30 per cent Frontier Exploration Fund, a statutory deduction introduced to finance oil and gas exploration in frontier basins.

According to the committee’s review, NNPCL submitted utilisation records for the frontier exploration fund covering the period 2008 to 2024, spanning both the pre- and post-Petroleum Industry Act eras.

However, the sub-committee noted that the documents did not provide project-specific details, including a breakdown of expenditure for each basin where exploration activities were carried out. As a result, the committee wrote to NNPCL requesting a proper reconciliation that links each exploration project to the exact amount spent.

The sub-committee said it is still awaiting the company’s updated submission, adding that the reconciliation remains a work in progress. It explained, “The NNPCL had submitted the utilisation of the frontier exploration fund from 2008-2024, covering both the Pre and Post PIA. However, the Sub-Committee observed that there were no specifics on expenditure incurred on the exploration activities carried out in each of the funds.

“The committee had written to NNPCL requesting it to tie each project carried out within the Basins to the amount expended. The Sub-Committee awaits NNPCL’s response. This assignment is still a work in progress.”

The scrutiny follows a government-led probe into the 30 per cent Frontier Exploration Fund, aimed at ensuring transparency and proper utilisation of billions earmarked for oil and gas exploration across Nigeria’s frontier basins.

In a related development, the committee also reviewed outstanding liabilities owed by NNPCL to the Federal Inland Revenue Service and the Nigerian Upstream Petroleum Regulatory Commission for the period June to December 2023. The outstanding payments, totalling N2.03tn, are to be accounted for by the Office of the Accountant-General of the Federation.

The sub-committee confirmed that the amount has been incorporated into the ongoing reconciliation being handled by the Stakeholders Alignment Committee, which is expected to submit its final report to the Federal Ministry of Finance to conclude the matter.

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Data from FAAC documents show that the outstanding obligations comprise N1.19tn in NUPRC royalties and N843.28bn in FIRS taxes, accumulated over the seven months. Monthly breakdowns indicate the largest liability was recorded in August 2023, amounting to N470.25bn, followed by payments due in October and November.

The World Bank has accused NNPCL of failing to fully remit oil revenues to the Federation Account, thereby undermining fiscal transparency and macroeconomic stability.

The bank noted that while the company was corporatised in 2021 to operate as a commercial entity, it still retains monopolistic control over crude oil sales and foreign exchange inflows, leading to persistent gaps between reported earnings and actual remittances.

“NNPCL has remained a key source of revenue leakages,” the World Bank stated, urging the government to “strengthen oversight, ensure full disclosure of oil proceeds, and improve transparency in federation revenue management.”

The institution said the state-owned company has only been remitting 50 per cent of revenue gains from the removal of the Premium Motor Spirit subsidy to the Federation Account. It said out of the N1.1tn revenue from crude sales and other income in 2024, the NNPCL only remitted N600bn, leaving a deficit of N500bn unaccounted for.

“Despite the subsidy being fully removed in October 2024, NNPCL started transferring the revenue gains to the Federation only in January 2025. Since then, it has been remitting only 50 per cent of these gains, using the rest to offset past arrears,” the World Bank stated.

Since assuming office, the NNPCL Group Chief Executive Officer, Bayo Ojulari, has consistently pledged to entrench transparency, efficiency, and accountability in the company’s operations. He has repeatedly assured Nigerians and the global investment community that the company’s books would be transparent and that its dealings with the Federation Account would be fully compliant with fiscal rules.

However, despite these assurances, legacy issues from previous years, particularly allegations of under-remittance running into tens of billions of dollars, continue to cloud the company’s transparency drive.

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Police comb forest after terrorists abduct NECO students in Borno

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The Borno State Police Command has deployed security operatives to Lassa community in Askira/Uba Local Government Area following the abduction of an unspecified number of students writing the National Examinations Council examinations by suspected terrorists.

PUNCH Online had earlier reported that the attackers stormed the school at about 9 a.m. on Monday, shooting sporadically before abducting students and women selling food items within the school premises.

Confirming the deployment to PUNCH Online, the spokesperson for the Borno State Police Command, Nahum Daso, said security operatives confronted the attackers, preventing a larger-scale abduction.

“Around 9 a.m. in the morning, ISWAP attacked Lassa Day Secondary School. They shot sporadically. An unspecified number of students have been abducted.

“Security forces confronted them. For now, we have an unspecified number of students who were abducted. The CP deployed the Area Commander in Askira/Uba. They are currently combing the bush,” Daso said.

The Special Adviser to Adamawa State Governor, Ahmadu Fintiri, on Media and Strategy, Mr Solomon Kwamagar, a resident of Lassa, also confirmed the incident to PUNCH Online on Monday morning.

He disclosed that the attackers arrived on motorcycles and invaded the school.

“Today is Lassa market day. I was informed that they came through the market on motorcycles and went to Government Day Secondary School, Lassa. They shot and killed one teacher and took away all the students who were in their classrooms,” he said.

Kwamagar added, “Lassa in Borno State is predominantly inhabited by my people, the Margi. We are in both Adamawa and Borno states. I am from Lassa, but I chose to reside in Madagali Local Government Area of Adamawa State.”

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He further said, “I’m still making contacts to ascertain the total number of students and teachers who were kidnapped from the school.”

Earlier, the President of the Borno South Youth Alliance, Samaila Kaigama, told PUNCH Online that the attackers wore military and forest guard uniforms.

“Yes. There was an attack on students writing NECO exams. The terrorists came around past nine. They passed the military checkpoint. They wore military and forest guard attire. They shot sporadically,” he said.

Kaigama said one teacher was killed while another sustained gunshot injuries.

“They killed one teacher from Chibok. They shot another, but not dead yet. They also kidnapped some students and women selling on the school premises. The numbers are not yet out,” he said.

When contacted, the Chairman of Askira/Uba Local Government Area, Mada Saidu, declined to comment.

“I am very busy now. We are in a situation,” he said.

Efforts to obtain comments from the state Commissioner for Information and Internal Security, Usman Tar, were unsuccessful as he neither answered calls nor responded to messages.

However, residents who spoke to PUNCH Online claimed that two teachers and one student were killed during the attack.

“They killed two teachers and one female student. The student was shot in her mouth,” a resident who requested anonymity said.

On May 16, PUNCH Online reported that 42 students and pupils were abducted after suspected Boko Haram terrorists attacked Mussa Primary and Junior Secondary School in Askira/Uba Local Government Area.

The senator representing Borno South, Ali Ndume, had said the abductees comprised four students of Government Day Secondary School, 28 primary school pupils and 10 children abducted from their homes.

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NASS sends state police bill to 36 states’ assemblies

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The National Assembly is set to transmit the Constitution Alteration Bill seeking the establishment of state police to the 36 state Houses of Assembly this week, marking the next critical stage of one of Nigeria’s most far-reaching security reforms.

The development comes days after the Senate passed the landmark constitutional amendment, with lawmakers now racing to secure the approval of at least 24 state legislatures before the bill can be transmitted to President Bola Tinubu for assent.

Chairman of the Senate Committee on Media and Publicity, Yemi Adaramodu, disclosed the development in an exclusive interview with The PUNCH on Sunday, saying all the necessary arrangements had been concluded for the transmission.

According to him, the state legislatures and governors were already awaiting the bill following consultations held ahead of its passage by the National Assembly.

“The bill for the creation of state police will get to the states this week. The states’ speakers have met and are awaiting the bill from the National Assembly.

“The state governors are expecting it too, even with their presence in the Senate chamber when the bill was being considered and passed,” Adaramodu said.

The planned transmission signals the beginning of the final constitutional hurdle for the proposed amendment, which requires endorsement by not less than two-thirds of the 36 state Houses of Assembly in line with Section 9 of the 1999 Constitution before it can become law.

Momentum has continued to build behind the proposal since the Senate approved the amendment after a clause-by-clause consideration of the report presented by the Senate Committee on the Review of the Constitution, chaired by Deputy Senate President Barau Jibrin.

The legislation seeks to establish a dual policing structure that will empower state governments to establish and maintain police services within their jurisdictions while preserving the constitutional responsibilities of the Nigeria Police Force over national security matters such as terrorism, border security, cybercrime, arms trafficking and other federal offences.

To address longstanding concerns over possible abuse by state governments, lawmakers incorporated several safeguards into the bill, including provisions prohibiting state police authorities from targeting individuals or groups for criticising governments and empowering the Federal Government to intervene in cases involving threats to national security, breakdown of public order or violations of fundamental human rights.

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The proposed reform has received unprecedented backing from governors, speakers of state legislatures and major political stakeholders across the country.

The Conference of Speakers of State Legislatures in Nigeria had earlier endorsed the bill, with its Chairman and Speaker of the Delta State House of Assembly, Emomotimi Guwor, assuring Nigerians that all state houses of assembly would give the proposal diligent consideration.

Several governors have also welcomed the amendment, describing it as a timely response to worsening insecurity across the federation.

Among them, Benue State Governor, Hyacinth Alia, described the Senate’s passage of the bill as a landmark step towards strengthening Nigeria’s security architecture, arguing that state police would possess a better understanding of local terrain and community dynamics, thereby improving intelligence gathering and response to criminal activities.

Similarly, the Forum of Progressive Speakers of State Legislatures under the All Progressives Congress pledged to facilitate speedy ratification in APC-controlled houses of assembly while promising robust oversight mechanisms to ensure professionalism and respect for human rights.

The Labour Party also threw its weight behind the proposal, describing the Senate’s action as a significant milestone in the quest to strengthen internal security through community-based policing.

Though it acknowledged concerns over possible abuse by governors, the party expressed confidence in the constitutional safeguards embedded in the amendment.

The proposal also attracted opposition from the Peoples Redemption Party, which questioned the timing of the initiative and urged Nigerians to reject it, arguing that the current administration lacks the credibility to oversee such a fundamental restructuring of the country’s policing system.

Despite the reservations expressed by critics, the planned transmission of the bill to the states this week is expected to trigger deliberations across the 36 Houses of Assembly, where lawmakers will conduct public hearings, stakeholder engagements and legislative scrutiny before voting on the constitutional amendment.

If at least 24 state assemblies endorse the proposal, it will pave the way for President Bola Tinubu’s assent, potentially ending decades of debate over the decentralisation of policing and ushering in what many stakeholders believe could be the most significant reform of Nigeria’s internal security architecture since the return to democratic rule in 1999.

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Meanwhile, the Senate on Sunday defended the passage of the state police bill, insisting that its passage, which 84 senators supported, is a response to Nigeria’s worsening security challenges.

The upper chamber said the bill emerged from years of consultations, public engagements, and broad national consensus, stressing that it would be wrong to delay the proposal for political calculations ahead of the 2027 general election.

The position comes amid growing debate over the constitutional amendment bill, with supporters arguing that decentralising policing will improve security at the grassroots, while critics fear that state police could be abused by governors to intimidate political opponents.

Defending the Senate’s decision in a statement issued by his media office on Sunday, the Leader of the Senate, Opeyemi Bamidele, said the proposal was “purely a child of necessity and not of political expediency as well as a product of national consensus and not of cynicism.”

He maintained that the establishment of state police had become a matter of urgent national importance that should not be sacrificed because of anyone’s political ambition.

According to him, the process leading to the passage of the bill did not begin recently but evolved through extensive constitutional review engagements involving key stakeholders across the country.

Despite some dissenting views, Bamidele said observations had shown that Nigerians largely welcomed the passage of the bill with the belief that it would significantly improve security at the sub-national level.

He said, “The state police proposal was part of memoranda submitted to the Senate Ad hoc Committee on the Review of the 1999 Constitution. The memorandum had been subjected to a rigorous process and multi-tiered consultation across the federation due to its sensitive nature.

“During this process, the National Assembly broadly consulted the executive, the Nigeria Governors’ Forum, the Conference of Speakers of the State Legislatures of Nigeria and the leadership of the Nigeria Police, among others.

“In July 2025, the National Assembly conducted public hearings in all geopolitical zones, and the participants overwhelmingly approved it.

“At each level of our consultation, nearly all stakeholders embraced the State Police Bill in the light of stark realities we are facing today.”

The Senate Leader said the Nigerian Police actively contributed to the drafting of the constitutional amendment by offering recommendations that helped lawmakers build safeguards against potential abuse of state police by political actors.

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According to him, those recommendations formed part of accountability and oversight mechanisms embedded in the legislation to ensure that state police operate within constitutional limits.

He added that the willingness of the Nigerian Police to support the proposal underscored its strategic importance in addressing insecurity at the local and state levels.

Beyond the contributions of the police hierarchy, Bamidele said the bill was subjected to extensive debates in both chambers of the National Assembly before its eventual passage.

He noted that support for the legislation cut across party lines.

He said: “Even though the APC is the majority, there are members of opposition parties – PDP, ADC, NDC and Labour Party – that exercised their discretion in favour of the Bill, mainly in the national interest and not on a parochial basis.

“In the Senate, for instance, 84 out of 109 members voted clause by clause in support of the Bill. This accounted for 77.06 per cent approval at the Senate alone.”

Bamidele argued that security should transcend political affiliations, noting that countries facing security threats often unite behind reforms aimed at strengthening national safety.

Globally, he said, security “is a collective public good that benefits citizenry across ethnic, political and religious divides.

“Political actors elsewhere always throw off their togas of partisanship and parochialism to support initiatives that will boost and reinforce national security.”

He, therefore, urged opposition parties to contribute constructive ideas that would strengthen peace and stability across the federation rather than oppose initiatives solely on political grounds.

Bamidele also challenged opposition parties and leaders to come forward with ideas that would deepen the peace and stability of the federation.

“Even when they disagree on some grounds, they are under obligations to provide credible and useful ideas that can make our nation better and greater. Unfortunately, they have not passed this critical test of opposition democracy,” Bamidele said.

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Chaos as flooding shuts Lagos airport temporary terminal

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There was chaos at the temporary terminal of the Murtala Muhammed International Airport, Lagos, on Sunday after heavy rainfall caused severe flooding at the facility.

The departure hall, boarding gates, airline temporary offices, and other sections of the makeshift terminal were submerged. The situation forced the Federal Airports Authority of Nigeria to shut the terminal abruptly, as airlines operating from the facility could no longer process passengers.

As a result of the flooding, airlines, including Air France-KLM, Ethiopian Airlines, and Fly Gabon, were relocated from the terminal. According to officials, the terminal’s powerhouse was also flooded, forcing the authorities to switch off electricity.

Consequently, all airlines operating from the facility were moved to Terminal Two of the MMIA. FAAN officials alleged that the flooding was caused by blocked drainage channels, which they attributed to the Chinese company currently reconstructing the old international terminal.The incident came just months after FAAN shut the old MMIA terminal for a major reconstruction project estimated to cost more than N600bn. A few months ago, a fire also broke out at the old terminal, damaging parts of the facility.

Sources said the ongoing reconstruction of the old terminal by the Chinese contractor has caused several disruptions at the airport.

Reacting to Sunday’s flooding, FAAN spokesperson Henry Agbebire confirmed the incident, attributing it to the ongoing construction work at the airport.

According to Agbebire, the construction temporarily affected the drainage system, resulting in flooding. He said, “It was the construction works that affected the drainage. And for operational reasons, we have moved airlines operating from that terminal to Terminal 2, and the development has not really affected their operations.

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“There were no cancellations at all. We have taken immediate action to fix that problem to the extent that it doesn’t happen again. You can rest assured of that.”

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