- These are challenging times for governors as oil money from the sales of NNPC has stopped flowing like before for them to share
- Despite rising global oil prices, NNPC, since the start of 2021, is yet to drop a single Naira into government account for sharing of the 36 states
- NNPC's latest Federation Account Allocation Committee (FAAC) report shows it spent N656.68 billion in January and February
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
For the second time in 2021, the Nigerian National Petroleum Company (NNPC) Limited has failed to remit a kobo to the federation account despite the rising international prices of oil.
The federation account is jointly operated by the federal, state and local governments and money received is distributed to all.
According to an FAAC document retrieved from its website, NNPC earned N656.68 billion in revenue in the first two months of 2021 (N383.09 billion in January and N273.592 billion in February).
Out of this amount, NNPC said it spent N656.682 billion on various projects, including Gas Infrastructure Development, Frontier Exploration Services, Refinery Rehabilitation, Subsidy, etc.
PAY ATTENTION: Join Legit.ng Telegram channel! Never miss important updates!
A total of N383.090 billion was spent on the projects in January and another N273.592 billion in February.
Subsidy payment, also known as Under-Recovery of PMS/Value Shortfall alone, gulped N219.783 billion, while refinery rehabilitation cost N9.11 billion within the two months.
For Frontier Exploration Services and Pipeline Security & Maintenance cost, N8.4 billion and N1.1 billion were spent.
Huge pressure on the state LG
Most states depend heavily on FAAC allocations to survive, and the second zero remittance in the second month of the year could create a big problem.
Already, the Cross River State Government have decried the N34m federal allocation for March despite being an oil-producing state, The Punch reports.
In a statement titled “Cross River gets N34 Million from FAAC for March” the state said:
“This is coming on the heels of a similar abysmal figure of one hundred and seventy one million naira allocation for the month of February, 2022. Financial analysts believe that it is nothing short of a miracle that the state has not ground to a halt.”
Similarly, the Kwara State Government has also complained about the amount received for March despite the improvement in February.
A statement from the state Ministry of Finance quoted the Press Secretary, Babatunde Abdulrasheed said:
"March allocation showed an improvement over what was received by the state in February, however that the figure showed a downward trend on the expected revenue for both the state government and the 16 local government councils in the state.
"The local government councils were forced to source for extra funds to pay full monthly salary to their workers."
Railway, satellite lead list of 15 projects Nigeria agreed N2.50trn loan with China
Meanwhile, Legit.ng had earlier reported that the Debt Management Office (DMO) announced that Nigeria's overall public debt has increased.
The loan from China is one area many Nigerians are interested in amid stories of assets being seized from nations unable to repay their debt.
DMO has released a detailed analysis of loans received from China in the last 13 years, including how much has been returned and for what projects the funds were obtained.