NNPC to deduct N126bn from remittance to FAAC in June

The Nigerian National Petroleum Corporation (NNPC) says it will deduct about N126 billion from its remittance to the Federation Account and Allocation Committee (FAAC) for the month of May — due to the federation in June.

TheCable understands that the report has been sent to the government through the ministry of finance which NNPC and others report remittances to.

In April, 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 May.

In a copy of the letter seen by TheCable, the corporation said N111.96 billion would be deducted from April 2021 oil and gas proceeds — due to the FAAC in May — noting that the deduction was necessary to ensure the continuous supply of petroleum products to the nation and guarantee energy security.

The NNPC, in reaction, said the zero-revenue projection for May did not mean it was in bad financial straits as it pertains only to the federation revenue stream it manages.

ThisDay reports that the petroleum corporation, in a document signed by Bello Abdullahi on behalf of Umar Isa Ajiya, chief financial officer of NNPC, said it was still bearing the burden of the differentials from the sale of premium motor spirit (PMS), better known as petrol.

In the document which detailed the status of the corporation’s finances during the May FAAC meeting, the NNPC also confirmed that it did not make any remittance to the federation account during the period.

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

“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 $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.”

However, Kennie Obateru, the group general manager of NNPC public affairs division, in a phone call with TheCable on Monday, did not confirm the FAAC document.

“I am sure the information will come out at the right time from the right quarters, not from us. Why don’t you just wait for the ministry of finance to come out with the report of the remittances? I think that should suffice,” he said.