The Nigerian National Petroleum Corporation (NNPC) has informed the accountant-general of the federation that its monthly remittance to the Federation Accounts Allocation committee (FAAC) for May will likely be zero.
The corporation said this in a letter seen by TheCable on Tuesday, that N111.96 billion would be deducted from April 2021 oil and gas revenue that was meant to be remitted to the account in May.
The deduction, according to the regulator, become necessary to ensure the continuous supply of petroleum products to the nation and guarantee energy security.
“The Accountant General of the Federation is kindly invited to note that the average landing costs for Premium Motor Spirit for the month of March 2021 was N184 per litre 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,” the letter read.
“As the discussions between gGovernment and the Labour are yet to be concluded, NNPC recorded a value shortfall of N111.966,456,903.74 in February 2021 as a result of the difference highlighted above. Accordingly, a projection of remittance to the federation for the next three months is presented in the attached schedule.”
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The Group Managing Director of NNPC, Mele Kyari, had lamented last month about the burden of paying for subsidy on imported petrol which amounted to between N100 billion and N120 billion on monthly basis.
According to Kyari, NNPC absorbs the cost differential which is recorded in its financial books
He added that while the actual cost of importation and handling charges amounts to N234 per litre, the government is selling the product at N162 per litre to marketers.
There has been concern over shortfall in the FAAC revenue for the three tiers of government, with Governor of Edo State, Godwin Obaseki, alleging that the Central Bank of Nigeria (CBN) of printing N60 billion to augment the March allocation.
Meanwhile, Obaseki’s claim was refuted by the Minister of Finance, Budget and National Planning, Zainab Ahmed, while the Governor of the CBN, Godwin Emefiele, demanded a repayment of a loan given to state governors in 2017.
The zero remittance from NNPC will affect the monthly allocation to states for the coming months, which may make them unable to meet their statutory obligations such as payment of salaries to workers in their respective states.
