Subsidy payment: NNPC to deduct N170bn from remittance to FAAC in August

The Nigerian National Petroleum Corporation (NNPC) says it will deduct N170.4 billion from July remittance to the federation account and allocation committee (FAAC) — due in August.

In recent months, the NNPC has been deducting subsidy payments from oil and gas proceeds due to the three tiers of government.

Between February and May 2021, fuel subsidy payments gulped N274.04 billion, according to the NNPC document seen by TheCable.

In February, March and April, NNPC deducted N25.37 billion, N60.4 billion, and N61.97 billion, respectively.

In April, TheCable exclusively reported that subsidy cost made the corporation not make any remittance to the FAAC in May.

The NNPC had also deducted N126.2 billion from remittance to FAAC in June as reported by TheCable.

It further confirmed a subtraction of N114.3 billion from remittance to FAAC in July.

Quoting NNPC’s July document, THISDAY reports that the corporation was only able to remit N47.1 billion to the FAAC in July out of its projected N122 billion remittance, leaving a deficit of about N75 billion.

“The sum of N114,337,097,352.49, being the value shortfall arising from the difference between the landing cost and ex-coastal price of petrol recorded in May 2021, plus the N50 billion arrears of March 2021, was applied on the gross domestic receipts before arriving at the net receipt of N47.16 billion,” the document reads.

“The June 2021 value shortfall of N170,435,950,434.47 is to be deducted from the July 2021 proceeds due for sharing at the August 2021 FAAC meeting.”

The document further showed that the overall NNPC crude oil lifting of 11.58 mbbls (export and domestic crude) in May 2021 recorded a 29.27 percent increase relative to the 9.42 mbbls lifted in April 2021.

In addition, the FAAC document indicated that Nigeria maintained 1.53 million bpd of the Organisation of Petroleum Exporting Countries (OPEC) production cut in May 2021, excluding condensates.

Crude oil export revenue received in June 2021 amounted to $11.68 million, equivalent to N4.5 billion, while domestic gas receipts in the month was N37.4 billion.

Mele Kyari, group managing director of NNPC, had said the pump price of petrol should be N256 per litre.

He noted that subsidy payments had begun to gulp between N140 billion to N150 billion monthly.