NNPC remits N522bn to federation accounts in 10 months

The Nigerian National Petroleum Company (NNPC) Limited remitted N522.203 billion oil proceeds to the Federation Accounts Allocation Committee (FAAC) in 10 months, reports have shown.

The remittances were from January to November but excluding April when it had no remittance to the federation account.

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The FAAC remittance is the revenue NNPC Ltd derives from the sale of oil which it pays in the FAAC, a pool of revenue from all Government Owned Enterprises (GOES). The revenue is then shared monthly by the federal, states and local governments.  

Analysis of the remittance so far this year indicates that the highest revenue remitted to FAAC by NNPC Ltd was N90.8bn in January and N80bn in August; the lowest was N10.5bn remittance just in November.

The breakdown of the remittance shows that NNPC remitted N90.860bn in January but that dropped to N64.161bn in February, and further depleted to N41.184bn in March 2021. There was no remittance in April which was said to have gone for subsidising petrol pump price per litre to keep it at the 162 to N165 price band.

By May, the remittance to FAAC dropped to N38.608bn but rose significantly to N47.162bn in June and higher to N67.280bn in July before climaxing at N80.030bn in August.

The decline in remittance resurfaced again from September where NNPC Ltd remitted N67.533bn. By October it had gone down significantly to N14.850bn and then N10.536bn by November 2021. This 10-month remittance culminated in the N522.203bn FAAC year-to-date remittance.

On a month-to-month basis, remittance in November 2020 which was N88.957bn was far higher than the N10bn recorded in November 2021. However, there was no record of petrol subsidy in 2020.

The NNPC November FAAC remittance report indicated that more money that is meant for the federation account went for subsidising petrol to ensure it remains within a price band of N162 and N165. At least NNPC Ltd spent N1.159 trillion on the subsidy within 10 months of this year (February to November) so far.

Without the subsidy payment, the federal government, 36 States and the 774 local governments would have had N1.681tr from oil proceeds to share but were left with just N522bn.

But the records showed that the N1.1tr subsidy payment was just one of the items of expenditure that NNPC Ltd had made, which reduced the money meant for FAAC. Its gross revenue as of November was N2.992tr out of which it deducted N2.470tr, leaving the N522bn as net remittance to FAAC.  These deductions include N1.159tr subsidy or PMS under-recovery payment, N1tr tier one and tier two oil production expenses, N91.667bn refinery rehabilitation expenses, among other lesser deductions.