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States in final showdown with NNPC over remittances

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FAAC, STATESYUNUSUTHE 36 states of the federation are set for a final showdown with the Nigerian National Petroleum Corporation (NNPC) over its May remittances to the Federation Account Allocation Committee (FAAC).

The Forum of Finance Commissioners on Saturday, speaking on behalf of the states, debunked the claim of the NNPC, insisting the corporation did not remit any amount from crude oil sale into the Federation Account for the month of May, 2018.

Chairman of the Finance Commissioners Forum and Adamawa State Finance Commissioner, Mr Mamood Yunusa, who spoke with journalists in Abuja on current stalemate between NNPC and FAAC, alleged further that the corporation even short-changed the federation by N20.6 billion from petroleum profit tax and royalties for the month.

According to him, states are ready to face the consequences that delayed allocations will engender until the recurrent issues are resolved once and for all.

He said NNPC lied by claiming it had agreement with state governors to remit a maximum of N112 billion per month.

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He said, governors insisted NNPC must remit at least N112 billion per month when crude sold for around $50 per barrel.

“There are a lot of happenings with the NNPC; we have read in the papers that NNPC said it has remitted what it was supposed to remit to FAAC. NNPC claimed it remitted N147 billion. But what the NNPC actually remitted to FAAC is N127 billion.

“By law, NNPC is required to remit all funds that accrued from the sale of crude oil. Based on our analysis, this N127 billion is inclusive of royalty and PPT.

“How can that be? By the law establishing these agencies (DPR and FIRS), royalty should be given to DPR, while PPT should be given to FIRS in line with the law.

“NNPC has remitted N127 billion and it claims it was expected to remit only N112 billion. Even if they had agreed with the governor’s to remit N112 billion when the oil was sold at $50 per barrel, what stops them from paying more now that the oil price is at $80 per barrel,” he queried.

Yunusa, who said all the finance commissioners and the entire FAAC were behind the Minister of Finance who confronted the NNPC, alleged that the corporation had always acted lawlessly, forgetting that it was owned by the federation and mandated to do business and make profit on behalf of all Nigerians.

Although royalties were supposed to be remitted to Department of Petroleum Resources (DPR) and PPT to Federal Inland Revenue Service (FIRS), NNPC failed to act according to the law but remitted directly to Federation Account.

“NNPC just brought the money in a lump sum, thinking they can bamboozle us without doing the break down.

“Based on what is happening in the economy, especially in the oil and gas sector, the oil price is at $80 per barrel and the production is steady, which we are producing about two million barrels per day, we expect that the remittance from the NNPC should add value to what the federal government is doing.

“DPR confirmed to us that based on the production capacity, the royalty should be at N60.8 billion so when you add this N60 billion with the N127 billion remitted by the NNPC, it will give you N187.8 billion.

“The N60.8 billion royalty was supposed to have come through DPR. The royalty is supposed to have come separately from DPR, but the NNPC does not remit it to DPR. Again, based on the record of the NNPC which it uses in calculating PPT is 1/1:46.

“Whatever the amount, you multiply it by 1:46 therefore, the expected PPT is N87.6 billion.”

The forum also frowned on NNPC’s practice of arbitrarily deducting money for supposed expenses.

Yunusa said for May, NNPC claimed that it spent N3.5 billion on pipeline repairs without consultation with DPR, statutorily empowered to check and document such damages.

The corporation also claimed it spent N31billion on fuel subsidies for the month.

The post States in final showdown with NNPC over remittances appeared first on Tribune.

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