The Federal Account Allocation Committee (FAAC) has again clashed with the Nigerian National Petroleum Corporation (NNPC) over how much the state-owned oil corporation is to remit to it.
Ndu Ughamadu, Group General Manager, Public Affairs of the Corporation, said it gave FAAC N35billion extra from funds reserved for settling cash calls owed its Joint Venture partners, because of the posture of the governors.
In a statement released in response to the stalemate at Wednesday’s revenue sharing meeting between the three organs of the government, Ughamadu said the governors wanted NNPC to transfer another N40 billion to them after NNPC gave FAAC N147 billion — N35 billion more than the N112 billion that the corporation had agreed with the allocation committee to give monthly.
He said that the monthly remittance will be paid subject to sufficient funds from sales of domestic crude oil allocation for the corresponding month after meeting cash call obligations on joint venture operations, as well as deductions of petrol – cost under recovery and pipeline maintenance. He regretted that the governors were demanding an extra N40billion, saying: “It was unfortunate, given the fact that NNPC is set to exit the cash call phenomenon.”
On May 16, the Nigerian Governors Forum (NGF) met with Vice President Yemi Osinbajo and other executives. At the end of that meeting, they ordered NNPC to give an audit of its under-recovery expenditures on subsidy and the actual value of Joint Venture cash calls. Speaking after the meeting, Abdulaziz Yari, Governor of Zamfara and Chairman of NGF, had said: “On the issue of cost recovery otherwise called subsidy, the issue of subsidy resurfaced again after the efforts of Mr. President. Before now the oil was $40 per barrel and now it is about $78 a barrel, so therefore they are depending largely on importation.
“Therefore, the cost is higher than what they are selling at the filling station and they need more money. When there was no cost recovery, the NNPC clearly gave us the number of 33 and 35 million litres per day as the consumption of Nigeria.
“But now that with the new regime of cost recovery, NNPC is claiming daily consumption of 60 and 65 million litres per day, which we rejected and said no.
“So many of our international partners are saying that even if we are feeding Nigeria, Cameroon, Ghana and Niger, we cannot consume more than 35 million litters per day. So we are wondering where the 60 million litres is coming from. We are trying to sort that one out, that one is not yet resolved.
“At the same time, NNPC is making payment on behalf of Nigeria on cash-call contribution and also the NNPC is making payment of cash call arrears of Nigeria’s contribution. Our main concern is that in 2015, they said about $16.8 billion, which is outstanding, was not paid by the last administration and they negotiated it down to $5.1 billion according to them.”