FAAC: States Insist on Full Remittance by NNPC

Claim corporation remitted N127bn instead of N147bn NNPC: Issues will be resolved with the VP who chairs NEC

There appears to be no let off for the Nigerian National Petroleum Corporation (NNPC) on the controversy surrounding its remittance to the Federation Account for distribution by the three tiers of government for the month of May.

The commissioners for finance from the 36 states of the federation met last night and insisted that the states would not accept anything short of the NNPC fully remitting N20 billion outstanding to the Federation Account.

According to them, the state oil corporation remitted N127 billion instead of N147 billion into the Account, for the month of May.

The Federation Account Allocation Committee (FAAC) meeting where stakeholders gathered in Abuja on Wednesday for the sharing of the May allocation ended in a stalemate over the NNPC remittance

Addressing journalists on Saturday on recent developments over the calims and counter claims of remittances to the federation acccount, the Chairman of the Finance Commissioners Forum, Mr Mamood Yunusa alleged that the national oil company remitted N127 billion as May earnings instead of N147 billion, leaving a shortfall of N20 billion.

Yunusa said: "Based on all provable assumption parameters, the Nigerian National Petroleum Corporation (NNPC) is to remit N60 billion as Royalty based on the verbal admission of the Department of Petroleum Resources (DPR) and based on the MTEF (Medium Term

Expenditure Framework) submitted by NNPC. The Petroleum Profit Tax (PPT) expected was to be 1.46 multiplied by 60 billion amounting to N87.6 billion; amounting to N147 billion expected in the federation account as against N127 billion paid by NNPC."

He also disclosed that, at the inconclusive FAAC meeting on Wednesday, "NNPC claimed it spent N3.5 billion on product leakages, pipline vandalism, but the Department of Petroleum Resources (DPR), an agency that is supposed to keep such record claimed ignorance of the amount."

Yunusa also observed that the states got more revenue from NNPC when crude oil was $50 per/barrel, adding that they now receive far less when the commodity is almost $80/ barrel, wondering why such should be the case.

He said that as "equal stakeholders in the business, NNPC owes it a duty to Nigerians in the spirit of openness and transparency and by the Act that established it to be open and transparent to all stakeholders but states as stakeholders in federation account are not expected to take NNPC's account hook, line and sinker but are allowed by law to ask questions for clarity."

Following Wednesday's deadlock in the FAAC meeting, the Minister of Finance, Mrs Kemi Adeosun had briefed President Muhammadu Buhari, Vice President Yemi Osinbajo and state governors on the development

Adeosun who also briefed journalists said: “In my capacity as the chairman of FAAC, I briefed governors on the deadlock that we have got currently in the Federation Account and explained what happened. There was quite an extensive debate on what to do.

“For the purpose of this briefing, we operate the NNPC as a business. We have invested public capital in that business; and we have expectations of return. And when that return falls lower than our expectations, then the owners of this business, which in this case are the Federal Government and states, need to act.

“So, that was what caused the deadlock yesterday (Wednesday) and we really felt the figures the NNPC was proposing for FAAC were unacceptable. We felt that some of the costs couldn’t be justified, and so we have decided that rather than approve the accounts, we will go back and do further work.”

She added, “Further negotiations and interactions are going on with the NNPC as we speak. However, we did brief both Mr President and Mr Vice President on the deadlock and asked for their support and their forbearance in this, because the consequence of this is that salaries might well be delayed in many states as a result of this.

“But we feel that in order to get to the accurate figures that we need, we have asked for forbearance and the governors and the Federal Government are all in agreement that we need to get to the bottom of those figures.”

The Nigerian National Petroleum Corporation (NNPC) had earlier justified its N147billion June remittance to the Federation Accounts and Allocation Committee (FAAC), saying it is in line with the terms of agreement it had with governors on the matter.

A release by NNPC Group General Manager, Group Public Affairs, Mr. Ndu Ughamadu, on Thursday stated that the agreement corporation had with the governors was that it would make a monthly remittance of N112 billion to FAAC subject to sufficient funds from sales of domestic crude oil allocation for the corresponding month after meeting cash call obligations on JVs, deductions of Premium Motor Spirit (PMS)cost under recovery and pipeline maintenance.

The release stated that NNPC was able to surpass the terms of agreement with the governors on the monthly remittance for the month of June by N35billion, having taken a cue from their postures by taking from the sum meant for settling cash call obligations.

But yesterday, Ughamadu stated that the issues will be resolved by the Vice President who chairs the NEC.