…Revenue Into Federation Account Drops By N86.42bn
The Federation Account Allocation Committee (FAAC) on Monday night constituted a committee to find out the reasons for the delay in the Nigerian National Petroleum Corporation (NNPC) to make $1.48bn available to the three tiers of government.
PriceWaterHouse Coopers had in the report of its forensic audit report of the corporation recommended that the NNPC should refund the amount to the Federation Account.
The firm was last year hired to carry out the audit following an allegation by the former Governor of the Central Bank of Nigeria, Lamido Sanusi, that $20bn was not remitted to the Federation Account by the NNPC.
Sanusi, who is now the Emir of Kano, had written a letter to President Goodluck Jonathan that $49bn was not remitted to the Federation Account by the NNPC.
But following the controversy which the letter generated, a committee was set up to reconcile the account.
Sanusi later recanted and said the unremitted fund was $12bn. He later changed the figure to $20bn.
PwC had stated in the report that while the total gross revenue generated from crude oil lifting was $69.34bn between January 2012 and July 2013 and not $67bn as earlier stated by the Senate Reconciliation Committee, what was remitted to the Federation Account was $50.81bn and not $47bn.
The audit report revealed that $28.22bn was the value of domestic crude oil allocated to the NNPC, adding that total amount spent on subsidy for Premium Motor Spirit was $5.32bn.
But the Chairman, Forum of Finance Commissioners of FAAC, Mr. Timothy Odaah, while speaking on the matter in an interview with journalists after this month’s meeting, said the committee was worried about the delay in the release of the fund.
He said while President Goodluck Jonathan had given a directive for the fund to be made available, the corporation had yet to release it with about a month to the end of the current administration.
Considering the persistent drop in allocations to the three tiers of government, he said the money was needed by the states so that they could meet up with their obligations since majority of them had yet to pay salaries of workers and contractors for projects executed.
Odaah said, “We are making a clarion call that the $1.48bn coming from the audit of the NNPC should be made available so that we can clear what we owe with that.
“The coming (April) FAAC meeting is the last (for this administration) and we believe the money should come during that period because if it doesn’t come by then, it is belated and we don’t want it to escape that period.
“Today, there was a committee constituted for the purpose of ensuring a that we meet with the NNPC so that everything would be ironed out because we know that Mr. President has already given a directive and we also know that the minister (of Petroleum Resources) has directed that it should be paid but we don’t know exactly what is happening.
“We need that money; the Federal Government needs it, the states and local governments also need it, and if it is not released with this type of abysmal funding we have seen, it will be very terrible.”
Meanwhile, the continued shutdown of trunks and pipelines at various terminals continue to impact negatively on the country’s revenue as gross revenue accruing to the Federation Account dropped by N86.42bn to N315.04bn in March from the N401.46bn received in February.
The revenue figures for the period were released on Monday in Abuja shortly after the FAAC meeting, which was presided over by the Minister of State for Finance, Ambassador Bashir Yuguda.
A communique issued shortly after the meeting stated that the pipeline shutdowns affected crude oil revenues negatively.
For instance, a breakdown of the N86.4bn decline showed that while mineral revenue declined by N78.36bn from N306.94bn in February to N228.58bn in March, non-mineral revenue dropped by N86.42bn from the February figure of N94.52bn to N86.46bn.
However, the communique stated that there was an increase in the average price of crude oil from $48.65 to $55.34 in the period under review, boosting revenue by $43.73m.
Non-oil revenue dipped further in the month of March partly due to the fact that the timeframe for companies to file their returns had not fallen due.
Most companies operating with accounting year end of December 31 have up till March 31 to file in their returns.
The communique read in part, “The gross revenue of N315.04bn received for the month was lower than the N401.46bn received in the previous month by N86.42bn.42bn. The continued shutdown and shut-in of trunks and pipelines at various terminals continued to impact negatively on crude oil revenue.
“However, an increase in the average price of crude oil from $48.65 to $55.34 in February, 2015 boosted revenue by about $43.73m.”
The communique added that the drop in gross revenue also affected the statutory allocation for the month as distributable revenue to the three tiers of government dropped by N86.99bn to N435.06bn from the N522.05bn shared in February.
From the amount distributed under statutory allocation, the Federal Government received N146.48bn, representing 52.68 per cent; while the states and local governments received N74.29bn and N57.28bn, respectively.