No April Allocation For States, LGs As NNPC Remits Nothing To FAAC

• The macroeconomics variables affecting petroleum products pricing have changed

The Nigerian National Petroleum Corporation (NNPC) says it will not be able to meet up with its fiscal obligations due to the financial shortfalls occasioned by vagaries and discrepancies in cost of petroleum importation and subsidy payment.

In a letter addressed to Accountant-General of the Federation, the state-owned petroleum company said there will be zero remittance to the Federation Accounts Allocation Committee (FAAC) for the month of April 2021.

In the letter dated April 26, the NNPC said that it recorded a shortfall of N111,966,456,903.74 in February as a result of the landing cost of Premium Motor Spirit (PMS) which was N184 per litre as against the subsisting ex-coastal price of N128 per litre.

According to the corporation, the shortfall was not unconnected to the inability of government and the labour unions to reach a compromise on protracted issue of hike in fuel price.

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The letter stated that this will now be deducted from April 2021 Oil and Gas Proceeds, so as to ensure a continuous supply of petroleum products.

“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),” NNPC said its letter seen by Ekohotblog

“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 N184 per litre as against the subsisting ex-coastal price of N128 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 shortfall 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.

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“Accordingly, the AGF is invited 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. Please accept the assurances of my highest regards.”