The Nigerian National Petroleum Corporation (NNPC) says it will remit nothing into the federation account in the month of May due to costs incurred from subsidy payments on petrol.
The NNPC which made the announcement in a letter written to the Accountant-General of the Federation, explained that it recorded a value shortfall of N111bn in February 2021.
The corporation said the shortfall will affect its contributions to federal allocations to states for April and May.
The letter was dated April 26 and signed by NNPC Chief Financial Officer, Umar Isa. Those copied in the letter include the Minister of Finance, Budget, and National Planning; the Director General, Nigeria Governors Forum; the Director Home Finance; and the Chairman, Commissioners of Finance Forum.
“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,” the NNPC said.
“As the discussions between Government and the Labour are yet to be concluded, NNPC recorded a value short fall 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.
“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.”
The announcement will have huge consequences for a country already spending the bulk of its revenue on debt servicing.
NNPC remittances form a major part of revenues shared at the Federation Accounts Allocation Committee (FAAC) meetings in Abuja.