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The FAAC 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 benefits from the fund.
“We will not back down on our
demand for the reimbursement of the outrageous deductions from accruals into
the federation account,” a senior FAAC source told The Nation.
On May 16, FAAC asked NNPCL
to refund over N2.1 trillion to the federation account.
The NNPCL is yet to make the
refund, arguing 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 the 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 presented how
NNPCL denied the federation account of billions from January to March.
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.
“The FAAC members alarmed by
these deductions then asked the 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.”
The sub-committee
recommended: “The Chairman FAAC (Minister of Finance) should work with the
NNPCL on how to net-off the payable amount to reduce the outstanding value
shortfall (subsidy) against the Federation Account.”
The NNPCL Group Chief
Executive Officer (GCEO) Mele Kyari last week said that the company was owed
N2.8 trillion in petrol subsidy.
The FAAC is emboldened to go
after subsidy deductions following recoveries it made in favour of the
federation account.
The report adds: “For March
2023, the PMSC will like to inform the FAAC Plenary that a total sum of
N144,037,514,518.20 was recovered in favour of the federation account as
outstanding arrears from several revenue items of collection and paid to
designated accounts.
“These revenue items and what
they coughed up for the federation account are the Nigeria Liquified Natural
Gas (NLNG) Feedstock Sales Value Revenue Arrears, $47,635,326.80 at 434.98
Rate/$ (N/$) or N20,720,414,451.46; Federal Inland Revenue Service (FIRS)/
Direct Sale Direct Purchase (DSDP) Naira Petroleum Profit Tax (PPT) Transfer
Arrears of N95,666,959,482.83.
“Others are the Nigerian
Upstream Petroleum Regulatory Commission (NUPRC)/DSDP Naira Royalty of
N20,390,322,561.34; and NUPRC/PSC/MCA Oil and Gas Dollar Royalty $16,690,004.19
at 434.18 or N7,259,818,022.57.
“This brings the total
recovery into the federation account in March 2023 to $64,325,330.99 or
N144,037,514,518.20.”
FAAC questioned the exchange rates used to conduct business
by the NNPCL.
The report states: “NNPCL using exchange rate lower than the
CBN mandated official rate on Domestic Crude sale, FIRS PSC Crude and NUPRC
Royalty Crude Sale for the period January 2015 to December 2022, the sum of
N195,595,585,470.70 was established as a shortfall.”
The sub-committee said it “met with NNPC and all the
relevant agencies and agreed on the principles to be used for the remittances”.
“Thereafter, NNPCL requested some time to discuss with its
top management.
“However, on the 12th of May, 2023, NNPCL forwarded its position
to the sub-committee and it is being looked into by the ad-hoc committee.”