More insights have emerged on why the Federation Account Allocation Committee (FAAC) meeting was called off abruptly last Thursday without any meaningful discussions.
States who are currently cash-strapped discovered that upon grace period of three months given to the main revenue earner of the nation, the Nigerian National Petroleum Corporation (NNPC), it is yet to clean up its accounting system by way of paying all remittances due to the FAAC as and when due.
Accordingly, an analysis, prepared by the FAAC Post-mortem Sub-Committee meeting, raised eight issues for the NNPC to clarify which cut across the non-payment of N1.78trillion into the Federation Account within the period under review.
The report signed by the Chairman, FAAC Post-mortem Sub-Committee, Dr. Casimir I. Anyanwu, FAAC committee gave the highlights of NNPC’s outstanding payments into the Federation Account during Jonathan administration and under the current administration.
About N1.32trillion revenue from 2010 to 2015 is yet to be remitted by NNPC; about N460.649 has been unpaid between January 2016 and September 2017 bringing the total to N1.78trillion.
The document noted further that “The Gross Domestic Crude Revenues between 2010 and 2015 amounted to N5, 351,114, 508, 433.79(trillion); the PPPRA’s certified NNPC subsidy from 2010 to 2015 was N4, 026, 369, 698, 361.62(trillion) and the Net outstanding revenues due to Federation is N1,324,744, 810,072.12(trillion).
“The statement of NNPC Gross Domestic Crude Oil Sales Revenue due to Federation Account for the period January 2016 to September 2017 is as follows: Crude Volume(220, 619,908); Value of domestic crude purchase (N2,573,022, 429, 022.30 trillion); NNPC payment to the Federation Account(N2,112, 373, 341, 362.49 trillion); Gross Outstanding due to the Federation Account (N460,649,087,660.12 billion).”
Whereas the NNPC is said to be holding on to some outstanding payments because FAAC is yet to refund the N797billion it incurred as product and pipeline losses, the Ad-hoc Committee recommended to the Sub-Committee to visit NNPC in order to: “Verify and ascertain approvals to incur the expenses; Examine all contractual agreements on pipeline repairs; Identify the Strategic Reserves locations; and Examine the intervals at which the Strategic Reserves are kept and discharged.
“That the request by NNPC to include the sum of N797billion as contained in the recommendations of the Tripartite Committee of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), the Federal Ministry of Finance (FMF) and NNPC should not be granted because of the clause that ‘no refund should be made to any of the parties pending the conclusion of the Forensic Audit up to 2015.’
“The Secretary FAAC Post-Mortem Committee informed members that the report had taken into consideration the observations raised by the NNPC when the report was initially presented in March 2015.
Already, aggrieved governors are seeking more transparency in accruing revenue and remittances into the Federation Account. They have also demanded that NNPC should clear the backlog of outstanding payments into the Federation Account.
Besides, considering the observed rising oil prices, all the states have insisted that NNPC must increase its inflow into the Federation Account. They believe what the corporation is doing could be tagged under-declaration of revenues.
