Burdened by the heavy weight of petroleum subsidy, the Nigerian National Petroleum Corporation (NNPC) has notified the Federal Government of its inability to remit revenue to the federation account in month of May.
The corporation in a letter to the Federal and State governments through the Accountant General of the Federation (AGF), stated that it recorded a shortfall of N111, 966,456,903.74 in February 2021, as a result of the difference in the ex -coastal prices, and because of this, it planned to recoup the money in month of May, 2021. This means that there would be zero remittance into the federation account from NNPC.
This implies that there may not be enough revenue to share among the Federal, States and Local Governments. Meaning, that salaries may be delayed, especially among the states that depend on the monthly federal allocation to survive.
The Governor of Edo, Godwin Obaseki had alleged that N60 billion was printed by the Federal Government to shore up the monthly revenue allocation for both the states and the federal government.
The NNPC in the letter stated that the average landing cost of Premium Motor Spirit (PMS) for the month of March 2021 was Nl84 per litre as against the subsisting ex-coastal price of Nl28 per litre, which has remained constant notwithstanding the changes in the macroeconomics variables affecting petroleum products pricing.
It has therefore wants the AGF to note that the sum of N111,966,456,903.74 will be deducted from April 2021 Oil and Gas Proceeds due to the Federation in May 2021, which will translate to zero remittance to the Federation Account from NNPC in the month of May 2021. This is to ensure the continuous supply of Petroleum Products to the nation and guarantee energy security.
According a letter cited by BusinessStandardsng.com with reference no GED/CFO/FA/19 and dated 26th of April, 2021, written to the Accountant General of the federation, by the chief Financer Officer of the corporation, Umar Ajiya, and which a copy was also sent to it narrated the dare state of the finances of the corporation occasioned by the impact of hike in the prices of crude oil on the deregulated downstream sector.
The letter titled “RE; Impact of hike in price of crude oil prices on the deregulated downstream sector: Projected Remittance to the Federation Account for April to June 2021”.
It states thus: “Further to our previous correspondences on the above subject, we wish to advise on the projected remittance to the Federation Account for the months of April (May FAAC) to June, 2021 (July, 2021 FAAC).
“The Accountant General of the Federation is kindly invited to note that the average landing cost of Premium Motor Spirit (PMS) for the month of March 2021 was Nl84 per litre as against the subsisting ex-coastal price of Nl28 per litre, which has remained constant notwithstanding the changes in the macroeconomics variables affecting petroleum products pricing”.
“As the discussions between Government and the Labour are yet to be concluded, NNPC recorded a value short fall of N111, 966,456,903.74 in February 2021 as a result of the difference highlighted above. Accordingly, a projection of remittance to the Federation for the next three months is presented in the attached schedule”.
The following people were copied: Minister of Finance, Budget, and National, Director General, Nigeria Governors Forum, Director, Home Finance, Chairman, Commissioners of Finance Forum