A report by the Federation Account Allocation Committee (FAAC) has alleged that the Nigerian National Petroleum Company Limited (NNPCL) sold crude oil valued at N26.496 trillion but only remitted N13.226 trillion into the federation’s account.
The report, covering January 2012 to May this year, states that NNPCL withheld N13.270 trillion which should have been paid into the federation account.
According to the report, over the years, a total of N4.026 trillion in subsidy claims was certified by the FAAC.
This certification was done from January 2010 to December 2015 by the Petroleum Products Pricing Regulatory Agency (PPPRA). The FAAC has since then not certified any subsidy claims.
Attempts to get the reaction of the NNPCL to the report were not successful as text messages and email sent to the national company were not replied.
The report indicated that NNPCL paid a dividend of N81.166 billion “as September 2023 calendarised interim dividend into the Federation Account with the CBN”. The dividend payment was made on September 18. The same day, NNPCL transferred N2.960 billion as June 2023 crude oil revenue into the federation account with the Central Bank of Nigeria (CBN), and on September 21, the company transferred another N28.489 billion as June 2023 crude oil revenue “into the federation account with the CBN”.
On September 25, the NNPCL made another transfer of N25.407 billon “as September crude oil revenue into the federation account with CBN”. This transfer nullified an earlier transfer of N58.036 billion, which the apex bank was earlier mandated to transfer into the federation account.
In August, the NNPCL made a “funds transfer” of $158.17 million to the federation account with CBN. The nature of the fund or what it was meant for was not disclosed by the NNPCL in its letter to the CBN.
The report also detailed the balances in the federation revenue account domiciled with the CBN.
The federation revenue account is where FAAC saves difference between total revenue realised for a particular month and what is shared at that same month’s FAAC meeting.
The FAAC has been saving into the account shortly after President Bola Tinubu announced the stoppage of petroleum subsidy payments on May 29.
As at the weekend, the balances for both domestic oil and non-oil sectors stood at N1.56 trillion, underlining the determination of the government to save what would have been paid to oil marketers as subsidy.
A breakdown showed that in August, the revenue accounts had balance of N830.73 billion and in September, the balance was N725.49 billion.
The federation revenue accounts consist of various income sources. They are: non-oil revenue, oil revenue, Value Added Tax (VAT) and Electronic Money Transfer Levy (EMTL).
“This diversification in revenue streams demonstrates the government’s commitment to mitigating reliance on a single sector and fostering a resilient and sustainable economy,” the statement said.
A remarkable strides has been recorded by the Federal Government in the expansion of its revenue base by exploring non-oil sectors such as agriculture, manufacturing, telecommunications, and services.
“This shift towards a more diversified revenue structure has bolstered the country’s economic resilience,” the report said.
Savings from the stoppage of petroleum subsidy payments has contributed to the federation revenue accounts, government’s strategic management of the oil sector and its adherence to prudent economic policies towards ensuring a stable and steady flow of revenue for FAAC.
VAT has also been identified as a reliable source of income for the federation revenue accounts, a development that will enabled the tiers of government to finance crucial developmental projects and address pressing national priorities.
Another important component of the federation revenue accounts is the Electronic Money Transfer Levy (EMTL).
The EMTL has proven to be efficient and transparent.
By imposing a levy on electronic money transfers, the government has tapped into the growing digital payment ecosystem, benefitting from the increasing popularity of cashless transactions in the country.