The Nigerian National Petroleum Company (NNPC) Limited has withdrawn over N80 billion from the Federation Account Allocation Committee (FAAC) to fund “government priority projects”.
The money was withdrawn in several tranches between January and May.
Members of the Federation Account Allocation Committee (FAAC) are concerned about the deductions.
The FAAC Post-Mortem Sub-Committee report submitted on July 26 stated: “Members expressed concerns about the execution of the priority projects and whether there will be continued deductions from the Federation Account.”
The fears expressed by FAAC members is not unconnected with the new status of NNPC as a limited liability company.
The report noted that the total deductions from the FAAC account made by the NNPC “in respect of funding for government priority projects in year 2022 amounted to a total sum of N80,660,800,996.75”.
The sub-committee, after its July 22 meeting, informed FAAC members “that NNPC’s management was finalising arrangements to enable the post-mortem sub-committee visit the various locations of the government priority projects”.
In January, N24,836,128,257.47 was withdrawn from the Federation Account by NNPC.
In March, N19,198,677,047.62 was withdrawn, while in April, N17,888,313,333.33 was taken out.
In May, N18,745,682,358.33 was withdrawn.
Some of the government priority projects are gas pipeline contracts, NLNG train projects and others that the NNPC has not disclosed to FAAC members.
Former Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Elias Mbam, an engineer, said: “The only beneficiary of the FAAC money are the Federal Government, state governments and local governments.
“Any other person or body getting money directly from the federation account is illegal.”
A Commissioner of Finance from a Northwest state, who preferred not to be named, agreed.
He said: “NNPC deducts from the sales of crude oil directly to fund government priority projects before sending it to Federation Account.
“This is not right. We have been raising this issue time without number, but they keep repeating it.
“Now that NNPC has becomes a Limited Liability Company, we shall see what will happen again.”
The state governments, he said “do not have any input in the selection of the government priority projects”.
The report signed by Chris Akomas, Chairman, FAAC Post Mortem Sub-Committee, also revealed that the Nigerian Petroleum Development Company Ltd (NPDC) owes the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) $2,226,998,165.02 on Forcados Assets OMLs 119, 60-63, 11, 24 and 98.
In March, the management of NPDC and NUPRC jointly adopted a resolution on the legacy debt in their reconciliation (NUPRC used to be the Department of Petroleum Resources DPR).
An ad-hoc committee examined and discovered irregularities and discrepancies “between the previous resolutions at the January, 2020 reconciliation meeting and that of March, 2022”.
So far, NUPRC has offered “to allow the application of N1,568,538,135.00 worth of Atlantic Energy lifting from Forcadoes and Brass Assets to defray part of the indebtedness of NPDC to NUPRC from the sum of $2,226,998,165.02 as per the extract of the National Economic Council (NEC) presented by NPDC”.
Furthermore, NUPRC and NPDC have agreed that NPDC should pay the outstanding legacy debt of $599,818,170.02 in nine months starting from May, 2022 on a monthly instalment of $66,645,907.78.
On the issue of Outstanding Arrears of Revenue Inflows to the Federation from January to May, the report stated: “For the period of January to May, 2022, a total sum of $689,810,898.05 which was equivalent of N364,888,209,024.95 was received into the Federation Account as arrears of payment from different sources.
“These payments were made as part of efforts by the Sub-Committee’s monthly analysis and reconciliation of revenue collections and remittances into the Federation Account.”
The Post-Mortem Sub-Committee (PMSC) report also drew the attention of FAAC members to the deductions of ‘NNPC Value Shortfall from the Federation Account’ (also known as subsidy) for the period of January to May, 2022.
The report said: “The total sum deducted by NNPC for Premium Motor Spirit (PMS) Subsidy is N1,274,592,014,336.73.”
