NNPC remits N225.852bn to FAAC in 5 months

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The Nigerian National Petroleum Corporation (NNPC) remitted N225.852 billion to the Federation Account Allocation Committee (FAAC) in the first five months of 2021 out of the total sum of N613.834 billion.

Documents obtained from one of the federal ministries showed that N387.982 billion remained unpaid during the period under consideration, representing about 63.21 per cent actual budgetary forecast.

According to the NNPC/FAAC data, while the corporation was expected to pay a net amount of N122.767 billion monthly into the federation account, it was only able to remit N90.860 billion in January, N64.161 billion in February and N41.184 billion in March.

But as it earlier announced, the corporation was unable to make any payment into the federation account in April, while N29.647 billion was remitted in May.

Recall that the corporation had said it would deduct N114.337 billion from the June federation proceeds at a meeting held recently.

The documents showed that N225.852 billion was remitted as of May, while a projected N820.684 billion shortage of the net total forecast of N1.473 trillion for 2021 might be recorded by the end of the year if the current challenges continue.

While there might be other ancillary issues leading to the inability of the corporation to meet its obligation to the three tiers of government, the NNPC has had to deal with the major challenge of shouldering the government’s petrol subsidy payments in the last couple of months.

The elimination of payments for what the government now terms under-recovery has been a controversial issue for decades as attempts to alter the existing arrangement has always met with stiff resistance from the labour unions, civil society organisations as well as a cross-section of Nigerians.

In March 19, 2020 at a time the international prices of crude oil dropped, the Muhammadu Buhari-led administration had announced the total deregulation of the downstream petroleum sector.

However, there has been a rollback of that policy following the gradual recovery of the price of the commodity in the international market, which has invariably affected the pump price of fuel in the country.

In all, added to the funding of its ongoing major projects, payment for under-recovery, among others, the funding performance of the corporation showed that as of May, N1.088 trillion had been disbursed by the NNPC, including N195.652 billion in January and N191.194 billion in February.

In March, also, N224.589 billion was distributed, while in April and May, N156.366 billion and N320 billion were disbursed respectively.

NNPC’s group general manager, Mr. Mele Kyari, in March, said the federal government was subsidising petrol with about N120 billion monthly, describing the development as unsustainable.

He said while the actual cost of importation and handling charges amounted to N234 per litre, the government had been selling at N162 per litre, therefore, bearing the cost burden.

He said the NNPC could no longer afford to bear the cost, saying Nigerians would have to pay the actual cost sooner or later.

With ThisDay report

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