Business

NNPC reverses full deregulation, remits zero revenue at April FAAC

TNT Newsline May 22, 2021 4 minutes read

• Marginal Revenue Drop Poses Minimal Effect On States, AGF Insists
• FAAC Distributes N616.886B
• States Beg CBN To Extend Bailout Fund Moratorium

Nigerians may heave a sigh of relief, as the impact of full deregulation of petroleum products in the country by the Nigerian National Petroleum Corporation (NNPC) might be in abeyance, as the government-owned corporation tinkers with its deregulation plan.

The corporation, yesterday, made good its threat of a zero remittance at FAAC, as it deducted its subsidy payment for products importation, the implication of which is that the needed increase in prices of petrol might be shelved, at least for now.

It would be recalled that the NNPC Group Managing Director, Mr. Melee Kyari, earlier this month intimated the Auditor General of the Federation (AGF), via a letter, that due to the huge volume of subsidy payment reported as under-recovery as a result of the high cost of petrol importation to the country, it might not be able to deliver revenue to the Federation Account for monthly sharing by the three tiers of governments.

In the letter, the NNPC said it would deduct N112billion from oil and gas proceeds for April to ensure a continuous supply of products and guarantee energy security.

The AGF, Mr. Ahmed Idris, exclusively told The Guardian yesterday that the NNPC rendered zero contribution at yesterday’s Federation Account Allocation Committee (FAAC) meeting for the distribution of last April federation revenue.

The sum of N618.886billion, without the NNPC contribution, was pulled and distributed among the tiers of governments, which is less by N153.292 billion when compared with the March figure.

Meanwhile, a top source at the Central Bank of Nigeria (CBN) confiding in The Guardian on condition of anonymity said the cash-strapped states have been appealing to the apex bank to extend their bailout refund loans, which is due, and have even taken the appeal to the National Council of State (NEC), where it is currently receiving attention at the highest level.

But the source disclosed that the bank had not commenced deductions of their bailout funds.

The AGF, who is the Secretary of the FAAC, said the development, though not a pleasant one, but was very welcoming to douse tension, as Nigeria is an oil minerals dependent country.

“‘We just finished FAAC and I can confirm to you that NNPC delivered zero contribution to the Federation Account, yet the distribution went on seemingly. Though there was a marginal drop in the amount of revenue distributed, it is not enough to hamper the economies of the states negatively.

“This goes to confirm what we have been saying that it is the non-oil sector that is driving growth in the country and not the oil sector. At the meeting, other sectors rendered revenue, which we distributed, and we are happy by the development.”

A breakdown of the N616.886billion April revenue derived from statutory revenue of N429.733billion, comprising revenue from NCS, DPR and FIRS, showed that the federal government received N244.011billion, states received N193.432billion and local governments got N143.298billion, while the oil-producing states received N36.145billion as 13 per cent derivation and cost of collection/transfer and refunds got N79.468billion.

Also, there was a Value Added Tax (VAT) of N164.340billion; excess bank charges recovered, N0.563billion; exchange gain of N2.250billion and N20billion from non-oil revenue was added as augmentation.

The sum of N79.468billion was the total deductions for the cost of collection, statutory transfers and refunds, while the balance in the Excess Crude Account (ECA) was $72.413million.

The communiqué indicated that from the total distributable revenue of N616.886billion; the federal government received N244.011billion, state governments received N193.432billion and local governments received N143.298billion.

The sum of N36.145billion was shared with the relevant states as 13 per cent derivation revenue.

The communiqué confirmed that the Federal Government received N0.296 billion, state governments received N0.150billion and local governments received N0.116billion available from Excess Bank Charges.

According to the communiqué, last month, Petroleum Profit Tax (PPT) and Excise Duty recorded considerable increases, while collections for Companies Income Tax (CIT) and Oil and Gas Royalties decreased significantly.

Also, VAT and Import Duty took a marginal downturn. (The Guardian)