A new wave of tension has gripped Nigeria’s fiscal space as the Nigerian National Petroleum Company Limited (NNPCL) and Periscope Consulting enter another round of confrontation over the alleged $42.37bn oil revenue shortfall recorded between 2011 and 2017.
The dispute, revived by fresh submissions from both parties, has again pushed the Federation Account Allocation Committee into emergency reconciliation to prevent disruptions to FAAC inflows that states depend on for monthly expenditure.
NGF, NNPCL Clash Over Revenue Gaps
Fresh details from FAAC’s November 2025 post-mortem review show that Periscope Consulting the audit firm hired by the Nigeria Governors’ Forum insisted that the national oil company failed to remit billions in crude oil proceeds, domestic crude allocations, and associated statutory revenues.
However, NNPCL rejected the findings outright. The company argued that it “fully accounted” for all crude sales and denied owing the Federation Account any outstanding revenue for the period under review. This response immediately escalated the dispute, prompting the FAAC sub-committee to order a joint reconciliation meeting.
Periscope, however, maintained that NNPCL’s explanations “did not reconcile with audited data,” stressing that the alleged $42.37bn gap remains unresolved.
FAAC Orders Joint Reconciliation
To break the deadlock, the FAAC sub-committee directed both parties to harmonise their records and close out long-standing discrepancies. The committee confirmed that the reconciliation exercise remains ongoing.
This controversy adds to a long-running mistrust between state governments and the national oil company. Earlier in February, FAAC suspended its monthly meeting due to disagreements over an estimated ₦1.7tn in unremitted funds, a situation that nearly halted revenue distribution to states.
State governments argue that the opacity around crude sales, subsidy deductions, JV cash calls, and domestic allocations continues to weaken fiscal transparency.
Industry experts also attribute the persistent discrepancies to legacy issues. Professor Wumi Iledare described the alleged under-remittance as a “pre-PIA legacy problem,” insisting that the former NNPC operated under overlapping regulatory and commercial roles that made reconciliation difficult.
Frontier Fund, Tax Liabilities Raise New Queries
Beyond the $42bn controversy, FAAC’s review raised fresh concerns regarding NNPCL’s utilisation of the 30% Frontier Exploration Fund. Although the company submitted spending records from 2008 to 2024, the committee observed that the report lacked basin-specific details and project-by-project expenditure breakdowns.
FAAC has requested an updated report, which is still pending.
Additionally, the committee flagged ₦2.03tn in unremitted liabilities to the Federal Inland Revenue Service and the Nigerian Upstream Petroleum Regulatory Commission for June to December 2023. These obligations comprising NUPRC royalties and FIRS taxes have now been merged into an ongoing reconciliation by the Stakeholders Alignment Committee.
Meanwhile, the World Bank has repeatedly accused NNPCL of undermining fiscal transparency by failing to fully remit oil sale proceeds and foreign exchange inflows. It noted that despite the removal of the petrol subsidy, the company remitted only 50% of revenue gains from crude sales in 2024.
Transparency Promises Under Scrutiny
Although the NNPCL Group Chief Executive Officer, Bayo Ojulari, has consistently pledged to strengthen accountability, legacy issues particularly unresolved under-remittance allegations running into tens of billions of dollars continue to overshadow the company’s reform narrative.
For many Nigerians, restoring confidence in the country’s oil revenue system requires full implementation of the Petroleum Industry Act, real-time monitoring, and strict adherence to fiscal rules. Until then, FAAC’s monthly allocations which are the backbone of state and local government finance remain vulnerable to disputes.