We deducted N3.3tr from Federation Account for subsidy, says NNPCL

• Published date: 19 January 2023
• Publication title: Nigeria - The Nation

The Nigerian National Petroleum Company (NNPC) Plc deducted over N3.3 trillion from January to November, last year to pay for fuel subsidy.

The deductions were made from revenue the NNPC Limited was supposed to remit to the Federation Account.

This is contained in the Federation Account Allocation Committee (FAAC) Post-Mortem Sub-Committee (PMSC) report presented to FAAC on Tuesday in Abuja.

The report stated that NNPC 'deducted N152,852,247,197.02 as PMS value shortfall recovery for November 2022. This brings the cumulative deduction between January and November 2022 to N3,302,465,705,596.30'.

The report also accused the NNPC of failing to disclose the locations Government Priority Projects it inherited when it transformed to NNPCL.

According to the report, 'NNPC Ltd was yet to disclose the locations of the Government Priority Projects to enable the Sub-Committee visit and assess the level of work done in view of the deductions from the Federation Account'.

The report noted that 'following the implementation of the Petroleum Industry Act, 2021 which transferred Joint Venture (JV) assets in the oil and gas Sector to NNPC Limited with the exception of Production Sharing Contract assets, the Priority Projects are owned by NNPC Limited'.

Between January 1999 and July 2022, the NNPC is said to have deducted N1,096,867,042,733.94 for government priority Projects, an amount, which should have gone into the Federation Account.

The Nation learnt that these priority projects were supposed to contribute revenue into the Federation Account but have remained invincible to FAAC.

Last year, the NNPC did not remit a kobo into the Federation Account because it was using revenue generated from the sale of crude oil to pay for PMS subsidy. This significantly impacted the quantum of monthly allocation the states ought to have received last year.

The FAAC Post-Mortem Sub-Committee also discovered that the NNPC Plc under paid the Federation Account by N185,458,842,270.76 'as a result of NNPC using Exchange Rate lower than the CBN official rate on Domestic Crude sale for the period 2015 to 2022'.

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