We Will Reconcile N2.1trn Subsidy Deduction With FAAC – NNPC
The Nigerian National Petroleum Company (NNPC) Limited says it would reconcile subsidy deductions with the federation.
The Federation Account Allocation Committee (FAAC) had in May asked NNPCL to refund over N2.1 trillion to the federation account.
NNPCL made its position known in a tweet on its official Twitter handle yesterday under a post titled ‘Petrol Subsidy Fact Sheet. The company contrary to widespread believe equally said it has made petrol subsidy payments to marketers since 2016 when it become the sole importer of petrol, adding that NNPC Limited will no longer be the sole importer of petroleum products. NNPCL had said it deducted N152.85 billion as a shortfall for the importation of petrol (subsidy) in November 2022 during its monthly presentation to FAAC meeting on Wednesday, January 17, 2023. Subsidy or under-recovery is the underpriced sales of premium motor spirit (PMS), better known as petrol.
However, FAAC documents showed that due to deductions for subsidy payment, the oil company had zero contribution to the federation revenue account in the month under review.
In January, February, and March 2022, petrol subsidy payments gulped N210.38 billion, N219.78 billion, and N245.77 billion, respectively. In April, May, and June, the country spent N271 billion, N327.07 billion, and N319.18 billion, respectively.
Also in July, August and September, and October 2022, subsidy gulped N448.782 billion, N525.714 billion, N341.937 billion, and N239.411 billion, respectively. “The NNPC Limited deducted the sum of N152,852,247,197.02 as PMS value shortfall recovery for the month of November, 2022. This brings the cumulative deduction between January and November 2022 to a total sum of N3,302,465,705,596.30,” the document reads.
FAAC had accused the company of denying the government of huge funds from January to March. FAAC is a body that distributes revenues generated into the federation account to the tiers of government and other agencies that benefit from the fund. Though, NNPCL is yet to make the refund, explaining that the Petroleum Industry Act (PIA) does not permit it to do so.
Details of the net-offs are contained in FAAC’s Post Mortem Sub-Committee (PMSC) report submitted to the whole house at its last meeting in Abuja.
According to a document , “the Sub-Committee requested NNPCL to net-off the sum of N1,432,576449,686.59 from the total Value Shortfall (subsidy payment) of N3,602,392,567,863.19 as per NNPCL April 2023 report”.
This will leave NNPCL owing the federation account N2,169,816,118,177 as of March.
“However, the NNPCL representative explained to the sub-committee that the PIA did not authorise the company to do a net-off,” the report states.
According to the PMSC report, “the NNPC Ltd deducted N341,530,577,208.78 as PMS value shortfall payables for March 2023”.
The report states: “Value Shortfall Recovery (subsidy) from Federation Account as of March 2023: Opening Balance (01/1/2023) was N526,461,161,901.53.
“In January 2023, NNPCL deducted N309,192,846,944.09, bringing the cumulative deduction for January to N835,654,008,845.62.
“In February 2023, NNPCL again deducted N255,391,863,631.18, resulting in a cumulative figure of N1,091,045,872,476.80. In March 2023, N341,530,577,208.79 was deducted, bringing the total deductions as of March 2023 to N1,432,576,449,686.59.
