The three tiers of government, including the Federal, 36 State, 774 Local Governments, and the Federal Capital Territory (FCT), went home with bumper allocations for June after the Nigerian National Petroleum Company Limited remitted its first dividend payment to the Federation Account.
On Thursday, the Federation Account Allocation Committee (FAAC) said at the end of its meeting that it shared a total of N907.054 billion as statutory allocation from the Federation Account for June 2023.
The communique issued at the meeting presided by the Accountant General of the Federation, Oluwatoyin Madein, disclosed that gross statutory revenue realized for the month was about N1.153 trillion, out of which about N907.054 billion was distributed to the component units of the Federation.
The gross statutory revenue was higher by N451.134 billion than about N701.787 billion realized in the previous month, while the total distributable revenue comprised N301.501 billion as statutory revenue; N273.225 billion as Value Added Tax (VAT) revenue; N11.436 billion as revenue from Electronic Money Transfer Levy (EMTL), and N320.892 billion as revenue realized from the foreign exchange rates differential.
The communique also contained a report about the sum of N979.078 billion as total deductions for savings, transfers, and refunds as well as N73.235 billion as cost of collection by the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), and the Inspectorate Department of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
It was learned that the bumper allocation shared by the three tiers of government and the FCT was made possible by the remittance of about N123 billion into the Federation Account.
The remittance is the first in almost two years and since its transition from a state-owned national oil corporation to a public limited liability commercial entity regulated under the provisions of the Companies and Allied Matters Act (CAMA)in line with the Petroleum Industry Act (PIA) 2021.
The remitted revenue is said to consist of about N81 billion as monthly interim dividend by the company and N42 billion as 40 percent of the total profit oil revenue from the operating companies under the subsisting production sharing contracts (PSC) in the country.
The amount did not include the payments by the company for oil royalties and company income tax on its oil concessions.
Recently, the NNPC management claimed it was being owed arrears of over N1.3 trillion as the refund from the Federation Account being indebted by the Federal Government as a result of its exposure to liabilities from the payment for subsidy on petroleum product supply and distribution.
The claim was made following the inauguration of an inter-agency committee constituted by President Bola Tinubu to reconcile the company’s books and to resolve the lingering debt row.
While the Federal Government accused the NNPC of indebtedness to the tune of about N2.8 trillion, the NNPC countered with a claim that the Federal Government was owing almost N4.1 trillion being its unsettled outstanding claims for subsidy payments on petroleum products imports, supplies, and distribution on its behalf.
The company insisted the Federal Government must first settle its indebtedness to allow it to breathe, as the outstanding debt was negatively impacting its bottom line.
The establishment of the debt reconciliation committee followed a memo dated June 13, 2023, by the Group Chief Executive Officer (GECO) of NNPCL, Mele Kyari, appealing for the President’s intervention to help resolve the matter.
In the letter, Kyari said the decision to seek the President’s intervention was to put to rest all the allegations and counter allegations by some members of FAAC on the status of the NNPCL’s debts and remittances to the Federation Account.
It is not clear whether the payment of the N123 billion to the Federation by the NNPC last Thursday was as a result of the reconciliation of the debt debacle with FAAC.
