Although it described the proposed subsidy deduction as a value shortfall, the oil firm stated that the fund would be recovered from February 2022 proceeds due for sharing in the March 2022 Federation Account Allocation Committee meeting.
The Nigerian National Petroleum Company Limited is to deduct N242.53 billion as subsidy on Premium Motor Spirit, popularly called petrol, from the Federation Account this month.
Although it described the proposed subsidy deduction as a value shortfall, the oil firm stated that the fund would be recovered from February 2022 proceeds due for sharing in the March 2022 Federation Account Allocation Committee meeting.
The NNPC disclosed this in its latest presentation to the FAAC meeting, which was obtained in Abuja on Friday.
It said, “The December 2021 value shortfall recovery on the importation of PMS amounted to N210.38 billion.
“The recovery consists of December 2021 value shortfall of N176.48 billion plus the outstanding value shortfall recovery of N33.9 billion accrued over the 2021 year. The November 2021 spot arrears of N98.81 billion is also outstanding.
“The estimated value shortfall of N242.53 billion (consisting of N143.72 billion for January 2022 recovery plus November spot arrears of N98.81 billion) is to be recovered from February 2022 proceed due for sharing at the March 2022 FAAC meeting.”
In February, the NNPC remitted no money to FAAC due to its huge fuel subsidy spending and subsequent deduction from the Federation Ac
On March 3, 2022, state governors lambasted the NNPC for not remitting any funds at last month’s FAAC meeting.
The Chairman of the Nigeria Governors’ Forum and Governor of Ekiti State, Kayode Fayemi, had also wondered how the oil firm was bold enough to declare profit when it had not been meeting its FAAC obligations.
Fayemi had disclosed this alongside other governors during the Nigerian Governors’ Forum session on natural resources at the Nigeria International Energy Summit 2022 in Abuja.
He specifically pointed out that in the last Federation Accounts Allocation Committee meeting in February, the NNPC made zero remittance to the federation.
“We’ve just had the Federation Accounts Allocation Committee meeting a couple of days ago and the NNPC contributed zero to the Federation Accounts this month,” the governor had stated.
Various industry operators told Punch that unless the fuel subsidy regime was halted, the deductions might continue, as NNPC had been the sole importer of petrol into Nigeria for more than four years running.”
The oil firm had also been shouldering the cost of subsidy on petrol all these years. The actual cost of the commodity is far higher than the approved N162-N165/litre pump price.
The President, Petroleum Products Retail Outlets owners Association of Nigeria, Billy Gillis-Harry, explained that the actual cost of petrol without subsidy was usually a little higher than that of diesel.
He stated that if not for the subsidy, PMS would be selling around N550 to N600/litre going by the rise in crude price.
The approved subsidised pump price of PMS in Nigeria is between N162 to N165/litre, but oil marketers stated that the actual cost should be a little higher or about the same price of diesel had it been PMS was deregulated.