NNPC to deduct N215bn from FAAC remittance in September

The Nigerian National Petroleum Corporation (NNPC) says it will deduct a total sum of N215.32 billion from its remittance to the Federation Account and Allocation Committee (FAAC) in September 2021.

This is contained in a document presented by NNPC at a two-day FAAC meeting.

NNPC explained that the FAAC remittance deductions is a combination of a N175.32 billion value shortfall and N40 billion joint venture (JV) cost recovery.

In recent months the national oil company has made deductions from its contributions to the federation.

The corporation deducted N170.4 billion in August, N114.3 billion in July; and about N126 billion in June from its FAAC remittance.

“Out of the value shortfall of N143,286,281,752.62, the sum of N103,286,281,752.62 was applied on the Gross Domestic receipts before arriving at the net receipt of N67.28bn in order to make funds available for JV cost recovery to sustain the existing production level,” the document reads.

“The July, 2021 value shortfall of N175,317,701,294.80 & outstanding balance of N40,000,000,000.00 will be deductible from the August, 2021 proceeds due for sharing at the September, 2021 FAAC meeting.”

The document showed that between January and August, NNPC made a contribution of N349.25 billion to the federal, state and local governments with a deficit of N1.12 trillion.

A breakdown of the FAAC remittances includes N90.86 billion in January; N64.16 billion in February; N41.18 billion in March; N38.61 billion in May; N47.16 billion in June and N67.28 billion in July.

However, zero contributions were made in April which the NNPC noted that it was necessary to ensure the continuous supply of petroleum products to the nation and guarantee energy security.

Furthermore, the corporation said: “The overall NNPC Crude Oil lifting of 8.66 million barrels (Mbbls) (Export & Domestic Crude) in June 2021 recorded 19.84% decrease relative to the 11.58Mbbls lifted in May 2021.

“Nigeria maintained 1.554 Million barrels per day (bpd) OPEC Production cut in June 2021; Crude Oil export revenue received in July 2021 amounted to $12.95 million equivalent to N4.97 billion; while Domestic Gas receipts in the month was N6.8 billion”.