…N147bn June remittance justifiable – NNPC
Following the inability of the Federation Account Allocation Committee (FAAC) to distribute the accrued revenue for the month of May 2018, due to discrepancies in figures from the Nigerian National Petroleum Corporation (NNPC), the Minister of Finance, Mrs. Kemi Adeosun, has said that the federal government will not accept under-remittance of oil revenue from the NNPC even if it would cost delay in payment of June salaries.
The minister said that on her capacity as the Chairman of the FAAC, when she briefed the Governors on the deadlock that they have got currently in the Federation Account and explained what happened and that all have agreed that NNPC must remit more revenue than the N147 billion it remitted to FAAC.
Adeosun said this during the National Executive Council meeting on Thursday at the Aso Villa, Abuja.
She said that the federal government operates NNPC as a business, adding that, “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 the business, which in this case is the Federal Government and States, need to act.
“So, that was what caused the deadlock yesterday and we really felt the figures that the NNPC proposed 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 disclosed that further negotiations and interactions were ongoing with the NNPC.
“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 of the consequence which is that workers’ salaries might well be delayed in many states as a result of this.
In order to get the accurate figures, that we need, we have asked for forbearance and the State Governors and the Federal Government are all in agreement that we need to get to the bottom of these figures.
“In particular, now that the oil price is $76 per barrel in the spot market which means that bonny light is about $78, we want to aggressively set aside money in the excess crude account.
So, we are very very conscious that this period, this window of relatively high oil price might not last and we would like to be able to save.
“If we cannot get into the Federation Account the sort of revenues we are expecting then we will not be able to save.
So, it was a very important point really underscored by all the Governors and they really want action taken and they are fully in support of the positions of the Federal Ministry of Finance and the Commissioners of Finance not to approve the accounts until we get further explanations on some of the cost being implemented, “Adeosun said.
On what was the real issue with the NNPC, Adeosun said, “Based on oil price, oil quantity, you can pretty much calculate what you are expecting to see in the Federation Account and if the figure is less, then the right question that any stakeholder must ask is why?
“So, we have been going back and forth with NNPC to try and understand these figures before we can accept them.
Remember that the FAAC figures have to be formally accepted by the Federation Account Allocation Committee and we were simply not comfortable with the quantum of some of the deductions made and therefore we could not approve those figures.”
She further said that there was an interface going on between the Commissioners of Finance Forum, Federal Ministry of Finance, Office of the Accountant General, Central Bank of Nigeria and the NNPC, saying that , “We hope to be able to convene FAAC within next few days.”
The minister also disclosed that the balances in the excess crude proceeds account and stabilisation account in May 2018.
She said that there was an additional credit of $80.6 million that accrued into the Excess Crude Account.
The balances in the Excess Crude Account is $1,916,742,289.60; Stabilisation Account – N18, 892,864,216.65, and Natural Resources Account is N133, 715,427,387.37.
Meanwhile, the NNPC has justified its June remittance of N147 billion to the Federation Accounts and Allocation Committee (FAAC).
The Group General Manager, Group Public Affairs of the NNPC, Mr. Ndu Ughamadu, said in a statement that the June remittance was in line with the terms of agreement it reached with governors on the matter.
Ughamadu explained that the agreement NNPC had with the governors was that the corporation would make a monthly remittance of N112 billion to FAAC.
“This will be subject to sufficient funds from sales of domestic crude allocation for the corresponding month after meeting cash call obligations on Joint Ventures, (JV) deductions of petrol, cost under recovery and pipeline maintenance.“
He said NNPC was able to surpass the terms of agreement with the governors on the monthly remittance for June by N35 billion by taking from the fund meant for settling cash call obligations.
The NNPC spokesperson said the corporation regrets the governors’ additional request of N40 billion,” saying, it is unfortunate, given the fact that the corporation is set to exit the cash call phenomenon.