The Nigerian National Petroleum Corporation, NNPC has said it would not make any remittance to the Federation Accounts Allocation Committee, FAAC for the month of April and May due to fuel subsidy payments. In a document titled ‘January to March actual and April to June projected remittance to federation account’, the Corporation further stated that it would be able to remit only N12.966bn into the account for June.
The FAAC committee meets monthly to share funds generated by the Nigeria Customs Service, the Federal Inland Revenue Service and the NNPC among federal, state, and local governments. The NNPC is the biggest contributor to the account due to huge revenue generated from crude oil.
The document was attached to a letter written to the Accountant General of the Federation, dated April 26, and signed by the NNPC’s Chief Financial Officer, Umar Isa. Copies of the draft were also sent to the Minister of Finance, Budget, and National Planning; the Director-General of the Nigeria Governors’ Forum; the Director, Home Finance; and the Chairman, Commissioners of Finance Forum.
According to the letter, the Corporation explained how fuel subsidy had affected its revenue to FAAC. The document explained that the net revenue to FAAC in April is N111.966bn. The NNPC value shortfall as a result of petrol subsidy was put at N111.966bn- no remittance to FAAC was listed.
In May, net revenue to FAAC is projected to be N171.747bn, the NNPC value shortfall is put at N171.746bn- no remittance to FAAC. In June, the projected net revenue to FAAC is at N105.337bn, the NNPC value shortfall is N92.371bn, while the net revenue to FAAC after value loss is put at N12.966bn.
The NNPC stated that in January, February, and March, the oil firm’s net revenue to FAAC after value loss was N96.86bn, N64.16bn, and N41.184bn respectively.
“The Accountant-General of the Federation is kindly invited to note that the average landing cost of premium motor spirit for the month of March 2021 was N184 per litre as against the subsisting ex-coastal price of N128 per litre, which has remained constant notwithstanding the changes in the macroeconomic variables affecting petroleum products pricing.
“As the discussions between government and the labour have yet to be concluded, the NNPC recorded a value shortfall of N111,966,456,903.74 in February 2021 as a result of the difference highlighted above.
“The AGF is invited to note that the sum of N111,966,456,903.74 will be deducted from April 2021 oil and gas proceeds due to the federation in May 2021, which will translate to zero remittance to the Federation Account from NNPC in the month of May 2021,” the letter said in part