Petrol subsidy gulped N623bn in 11 months


The Nigerian National Petroleum Corporation (NNPC) spent a total of N623.16 billion on fuel subsidy between January and November this year.

The corporation disclosed this in its report dated December 19, 2018 and submitted to the Federation Account Allocation Committee (FAAC) at its last meeting in Abuja.

It also stated in the report that it has an arrears of N67.23 billion for deductions made from FAAC.

The report said there is a total FAAC deduction of N676.49 billion comprising N599.74 billion as under recovery for direct sales direct purchase (DSDP) arrangement and the sum of N23.43 billion as under recovered from its refineries.

The document said the amount incurred by the NNPC as under-recovery was deducted from the Federation Account as follows: January N45.78 billion, February N59.51 billion, March N34.03 billion, April N77.9 billion and May N88.9 billion.

A breakdown of the N623.16 billion under-recovery showed that the sum of N51.24 billion was incurred in January while February, March and April recorded N58.66 billion, N36.09 billion, and N82.4 billion respectively.

In the month of May, the amount of under-recovery incurred by NNPC on PMS dropped to N36.87 billion but rose to N53.41 billion in June, N52.43 billion in July and N63.18 billion in the month of August.

In the month of June 2018, the corporation deducted about N68.6 billion, in July, August, September, October and November the Corporation made deductions of N52.5 billion, N60.6 billion, N71.56 billion, N51.18 billion and N65.86 billion respectively.

Apart from the deductions from FAAC, the amount spent on subsidy or as under-recovery by the NNPC went up to N71.8 billion in September before dropping again to N51.18 billion and N65.86 billion in the months of October and November respectively.

FAAC, headed by the minister of finance, Mrs. Zainab Ahmed, is made up of commissioners of finance from the 36 states of the federation; the accountant general of the federation, Mr. Ahmed Idris, and representatives from the NNPC.

Others are representatives from the Federal Inland Revenue Service (FIRS), the Nigeria Customs Service (NIS), Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) and as well as the Central Bank of Nigeria (CBN).

The federation account is currently being managed on a legal framework that allows funds to be shared under three major components-statutory allocation, value added tax distribution, and allocation made under the derivation principle.

Under statutory allocation, the federal government gets 52.68 per cent of the revenue; states, 26.72 per cent; and local governments, 20.60 per cent.

The framework also provides that value added tax revenue should be shared thus: federal government, 15 per cent; states, 50 per cent; and local governments, 35 per cent.
Similarly, an extra allocation is given to the nine oil producing states based on the 13 per cent derivation principle.

With The Nation, The Punch reports


Please enter your comment!
Please enter your name here