NNPC pays N225bn to FAAC in 5 months — 63% remittance shortfall

The Nigerian National Petroleum Corporation (NNPC) has remitted N225.85 billion to the federation accounts allocation committee (FAAC) in the first five months of 2021.

This is according to the monthly crude oil and gas sales and proceeds report of the agency.

The NNPC was expected to pay a net amount of N122.767 billion monthly into the federation account, but only N90.86 billion was remitted to the FAAC in January, N64.16 billion in February and N41.18 billion in March, while no remittance was recorded in April, and N29.64 billion in May.

This shows N387.982 billion remained unpaid during the period under consideration, representing about 63.21 per cent actual budgetary forecast.

The NNPC had written Ahmed Idris, accountant-general of the federation, informing him that the corporation would not make any remittance to the FAAC in April due in May.

“No remittance to Federation Account in April 2021 (May 2021 FAAC) due to recorded value shortfall resulting from the difference between the landing cost and ex-coastal price of PMS (petrol) recorded in March 2021,” NNPC had said in the letter.

“The sum of N61,966,456,903.74 was deducted out of the total March value shortfall of N111,966,456,903.74. This is to make funds available for JV cost recovery to sustain the existing production level. The balance of $50,000,000,000.00 will be deducted in subsequent months.

“In addition, April value shortfall of N126,298,457,944.36 is to be deducted from May federation proceeds in June 2021 FAAC meeting.”

The document also show that 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.

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.

TheCable reported that the house of representatives committee on finance had summoned the corporation to provide evidence of remittances into the consolidation federation account.

The panel also demanded NNPC to provide details of N2,725,006,000 billion advanced consideration revenue. The amount — N1,904,495,000 million and N820,511,000 — were received from customers into the account of the corporation in 2018 and 2019 respectively.