The Nigerian National Petroleum Corporation (NNPC) has disclosed that its projected monthly remittance to the Federation Accounts Allocation Committee (FAAC) for May will be zero. The corporation said this in a letter to the Accountant-General of the federation, on Tuesday.
In March, Mele Kyari, group managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), had warned that the corporation can no longer bear the burden of underpriced sales of premium motor spirit (PMS), better known as petrol, to consumers in the country.
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In the letter to the accountant-general, NNPC said N111.96 billion will be deducted from April 2021 oil and gas proceeds — due to the federation in May — noting that the deduction is necessary to ensure the continuous supply of petroleum products to the nation and guarantee energy security.
“The Accountant General of the Federation is kindly invited to note that the average landing costs for Premium Motor Spirit for the month of March 2021 was N184 per litre against the subsisting ex-coastal price of N128 per litre, which has remained constant notwithstanding the changes in the macroeconomic variables affecting petroleum products pricing,” the letter read.
“As the discussions between Government and the Labour are yet to be concluded, NNPC recorded a value shortfall of N111.966,456,903.74 in February 2021 as a result of the difference highlighted above.
“Accordingly, a projection of remittance to the federation for the next three months is presented in the attached schedule.”
The zero remittance from NNPC will affect the monthly allocation to states for the coming months, which may make them unable to meet their statutory obligations such as payment of salaries to workers in their respective states.
A source told TheCable that the shortfall will be augmented from the N200 billion saved from previous months.