NNPC withheld N8.4trn FAAC contribution in 17 Months – RMAFC
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has revealed that the Nigeria National Petroleum Company (NNPC) Limited withheld about N8.4 trillion which would have been part of revenue accruing to Nigeria in the guise that it was used to pay for subsidy in the last 17 months.
Chairman of RMAFC, Mohammed Shehu, who made this known in a statement on Thursday, said the commission was solidly behind the removal of the subsidy as pronounced by President Bola Ahmed Tinubu in his inaugural speech.
Shehu said the commission had consistently expressed its position on the issue of petrol subsidy removal since the time of the late Hamman Tukur who chaired the commission during the administration of Olusegun Obasanjo, former president.
He said the agency’s position was premised on the fact that the continued “payment of humongous amounts to a privileged few in the name of subsidy” was a major drain on the nation’s scarce resources.
According to him, “the Nigeria National Petroleum Company (NNPC) Limited — one of the major sources of revenue to the federation account — had since stopped contributing to the national purse due to the subsidy regime.
“As one of the 14 federal executive bodies established by section 153 (1)(n) and empowered by paragraph 32 (a) and (c) of part 1 of the third schedule of the 1999 constitution (as amended), RMAFC has the constitutional mandate to monitor the accruals to and disbursement of revenue from the federation account and also advise federal and state governments on fiscal efficiency and methods by which their revenue can be increased.”
The chairman described the president’s pronouncement on the elimination of the petrol subsidy as a masterstroke that broke the jinx.
This, he said, was the appropriate step in the right direction.
“The country can no longer sustain fuel subsidies whose demerits far outweigh its benefits to the citizenry. It is saddening to note that since January 1, 2022, to date, the Nigeria National Petroleum Company (NNPC) Limited has not been contributing to the federation account due to the claimed subsidy payments,” he said.
“The total amount withheld by the NNPCL as claimed subsidies for this period amounted to N8,480,204,553,608.13 as reported by the office of the accountant general of the federation (OAGF) which is yet to be reconciled by the RMAFC, OAGF, and NNPCL.”
Shehu said in a situation where the records of petrol subsidy transactions are not transparent and crude oil prices are being determined globally, it would be unwise to sustain “the phantom payments of subsidy at the detriment of other critical sectors of the economy”.
The RMAFC chairman emphasised that the cessation of under-recovery payments would eliminate the uncertainty surrounding the subsidy regime.
He added that it will free up funds for the execution of critical national development and human capital enhancement projects such as the provision of an affordable transport system, investment in the education sector, improvement in health care, and infrastructural development.
While commending Tinubu for his “uncommon courage” and political will in doing away with the subsidy, Shehu urged the new administration to work out strategies that would cushion the attendant effects of the new policy.