The Nigerian National Petroleum Company (NNPC) was able to remit about N123 billion to the Federation Account last Thursday as a result of not paying for subsidy on petrol for June 2023, an investigation by this newspaper over the weekend has revealed.

The NNPC made the remittance despite the inter-agency committee constituted by President Bola Tinubu to reconcile the records of its remittances to the Federation Account yet to complete its assignment.

The committee was constituted following the lingering controversy over the alleged indebtedness of the company to the Federation Account as a result of the negative impact of the fuel subsidy payment on its operations.

A senior official in the Ministry of Petroleum Resources familiar with the issue told our reporter that the NNPC resumed its remittance to the Federation Account following the recent removal of fuel subsidy, which took effect from June 1.

The Federation Accounts Allocation Committee (FAAC), which consists of representatives of the Federal, 36 State Governments and the Federal Capital Territory, accused the NNPC of owing the Federal Government about N2.8 trillion in outstanding remittances to the Federation Account for almost two years.

But the NNPC had countered such accusations, claiming rather that it was the Federal Government that was indebted to it, as it was yet to refund about N4.1 trillion being arrears for subsidy the company paid on its behalf for the supply and distribution of petroleum products.

Concerned by the raging controversy, the Group Chief Executive Officer (GECO) of NNPCL, Mele Kyari, wrote to President Bola Tinubu on June 13, 2023, to appeal for his intervention to put an end to the disagreement surrounding the status of the remittances to the Federation Account.

Kyari said the NNPC was ready to clear whatever indebtedness FAAC claimed if the Federal Government would settle the arrears for subsidy payment on petrol, which he said would still leave a balance of N1.3 trillion.

On May 29, Tinubu announced in his inaugural speech the removal of subsidy from the petroleum products pricing template in the country from June 1, 2023.

Prior to that announcement, the NNPC had ceased to continue remitting revenues to the Federation Account as one of the revenue-generating agencies in the FAAC.

The company cited its inability to sustain its responsibility in view of the excessive burden it shouldered to ensure the supply and distribution of petroleum products as the supplier of last resort, as well as the payment for fuel subsidy, were sustained.

Such payment, the NNPC pointed out, imposed an enormous challenge on its operations, as it had to rely on its profits and limited resources to discharge that responsibility to the detriment of primary business.

As the sole importer and supplier of petroleum products, following the inability of the major and independent oil marketers to participate in the process, the NNPC claimed it bore solely the payment for the disparity in the landing cost and retail price of petrol in the form of subsidy on behalf of the Federal Government.

Also, with its new status as a commercial entity, by virtue of the provisions of the Petroleum Industry Act (PIA) 2021, which saw NNPC 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), NNPC said it was expected to operate profitably and pay dividends to its shareholders.

However, while the inter-agency committee constituted to reconcile the claims and counter-claims and resolve the lingering debt row is yet to complete its assignment, the NNPC last Thursday made about N123 billion in remittances to the Federation Account.

The NNPC said the remittance consisted of N81 billion as monthly interim dividend yet to be declared 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 NNPC remittance formed part of about N1.153 trillion gross statutory revenue realized for June 2023, out of which about N907.054 billion was distributed by FAAC to the three tiers of government.

FAAC said in the communique issued at the end of its meeting presided by the Accountant General of the Federation, Oluwatoyin Madein, that another sum of N979.078 billion was 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).