The Nigerian National Petroleum Corporation’s monthly remittance to the Federation Accounts Allocation Committee (FAAC) for May will be zero, the agency said in a letter to the Accountant-General of the Federation on Tuesday, The Cable has reported.
This may not be unconnected with dwindling revenue accruing from the underpriced sale of petroleum products.
The Group Managing Director of the corporation, Mele Kyari, had given a hint in March when he said the NNPC could no longer bear the burden of underpriced sales of Premium Motor Spirit (petrol) to consumers, but promised there would be no increase in the price of the product until talks between the government and stakeholders were concluded.
“The price could have been anywhere between N211 and N234 to the litre. The meaning of this is that consumers are not paying for the full value of the PMS that we are consuming and therefore someone is paying that cost.
“As we speak today, the difference is being carried in the books of NNPC and I can confirm to you that NNPC may no longer be in a position to carry that burden,” he had said.
In the letter to the accountant-general, NNPC said N111.96 billion will be deducted from April 2021 oil and gas proceeds — due to the federation in May. It said the deduction is necessary to ensure the continuous supply of petroleum products to the nation.
The letter reads, “The Accountant-General of the Federation is kindly invited to note that the average landing costs for Premium Motor Spirit for the month of March 2021 was N184 per litre against the subsisting ex-coastal price of N128 per litre, which has remained constant notwithstanding the changes in the macroeconomic 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.”