NNPC N12bn deficit affects revenue allocation to states, others
Government revenue for the month of March 2018, dropped by N77billion due to a N12billion underpayment from the Nigerian National Petroleum Corporation, NNPC, and a 13 percent decrease in crude oil export sales.
According to the Federation Account Allocation Committee, FAAC, gross statutory revenue for the month of March stood at N480.59billion, as against the N557.94billion generated in the preceding month.
The underpayment from the NNPC had stalled the federal account disbursement to the three tiers of government following a disagreement between the 36 states’ commissioners for finance and the corporation.
Addressing journalists after the FAAC meeting in Abuja, the Accountant-General of the Federation, Ahmed Idris, said aside the underpayment from NNPC, crude oil export sales decreased by 13 percent in March when compared with the 5.42 million barrels from the previous month.
With the shortfall, the three tiers of government therefore share N626.82billion amongst them as against the N647.39billion disbursed in March. The committee said the disbursement was made to allow the three tiers of government to pay workers’ salaries before the end of April, while reconciliation with the corporation is ongoing.
The AGF said the 13 percent decrease in crude oil exports volume led to a reduction in revenue from federation crude oil exports by $33.58million. While the average crude oil price increased from $63.08 to $65.72 per barrel, he noted that the production shutdown at various terminals for repairs and maintenance affected oil revenue.
However, Idris stated that there was a considerable rise in oil royalty for the month, while Companies’ Income Tax and import duty recorded marginal increases.
When asked when the NNPC would remit the underpaid revenue to the Federation Account, the AGF stated, “The reconciliation is ongoing. There is no public finance system that will be devoid of reconciliation at any time.
“So, reconciliation is part of the order and in that particular instance, reconciliation that started last month continued this month and there is nothing new.
“We couldn’t meet yesterday (Wednesday) because we felt certain milestones had to be reached and on getting to those milestones, we sat today and considered the figures for distribution.”
When asked how much the NNPC was to remit, Idris said that would be determined when the reconciliation was concluded.
He added, “On the amount that we are expecting to come in from the NNPC, we don’t talk on mere speculation or hearsay.
“We have to wait for the amount to come and we will know what will be distributed. We don’t base our projections on speculations; there has to be factual data.”
Meanwhile, a breakdown of the N626.82billion allocated by the committee, shows that the federal government received N263.1billion, after deducting the cost of collection to the revenue generating agencies.
The sum of N167.61bn was distributed among the 36 state governments and the Federal Capital Territory, while the 774 local governments received N126.29billion.
FACC disclosed that the balance in the Excess Crude Account has dropped from $2.3billion last month, to $1.83billion. Recall that President Buhari had approved the withdrawal of $496million from the ECA for the payment for Tucano aircraft to be supplied by the United States to boost the fight against insecurity.