A recent report by the Federation Account Allocation Committee (FAAC) has raised concerns regarding the Nigerian National Petroleum Company Limited (NNPCL), accusing it of selling crude oil valued at N26.496 trillion but remitting only N13.226 trillion into the federation’s account. The report, which covers the period from January 2012 to May of this year, alleges that NNPCL withheld N13.270 trillion that should have been paid into the federation account.
The report highlights that over the years, a total of N4.026 trillion in subsidy claims was certified by the FAAC. These claims, certified by the Petroleum Products Pricing Regulatory Agency (PPPRA) from January 2010 to December 2015, have not been certified by the FAAC since.
Efforts to obtain a response from NNPCL regarding the report have been unsuccessful, as text messages and emails sent to the company received no reply.
The report reveals that NNPCL made several financial transfers into the Federation Account. In September, the company paid a dividend of N81.166 billion as a September 2023 calendarized interim dividend into the Federation Account with the Central Bank of Nigeria (CBN). On the same day, NNPCL transferred N2.960 billion as June 2023 crude oil revenue into the federation account with the CBN, and on September 21, another transfer of N28.489 billion as June 2023 crude oil revenue was made into the federation account with the CBN. However, a subsequent transfer on September 25 of N25.407 billion as September crude oil revenue nullified an earlier transfer of N58.036 billion that the apex bank was initially mandated to transfer into the federation account.
In August, NNPCL made a “funds transfer” of $158.17 million to the federation account with the CBN, although the nature and purpose of the fund were not disclosed in NNPCL’s letter to the CBN.
The report also presents the balances in the federation revenue account domiciled with the CBN, which serves as a repository for the difference between the total revenue realized for a particular month and what is shared at the FAAC meeting. The balances in both the domestic oil and non-oil sectors of the federation revenue account stood at N1.56 trillion, underscoring the government’s commitment to saving what would have been paid to oil marketers as subsidy.
The federation revenue accounts consist of various income sources, including non-oil revenue, oil revenue, Value Added Tax (VAT), and the Electronic Money Transfer Levy (EMTL). The government’s focus on diversifying revenue streams, including non-oil sectors such as agriculture, manufacturing, telecommunications, and services, is aimed at fostering economic resilience.
The report also recognizes the efficiency and transparency of the Electronic Money Transfer Levy (EMTL), which has capitalized on the increasing popularity of cashless transactions in the country.
In conclusion, the savings from the cessation of petroleum subsidy payments, along with the government’s strategic management of the oil sector and adherence to prudent economic policies, have contributed to ensuring a stable and steady flow of revenue for FAAC. VAT and the EMTL are also identified as reliable sources of income for the federation revenue accounts, enabling the government to finance developmental projects and address national priorities.
