The Nigerian National Petroleum Corporation (NNPC) has disclosed that it will not be able to remit any amount to the federation accounts allocation committee (FAAC) for May.
The corporation said this in a letter addressed to to the accountant-general of the federation, dated Tuesday, 27th April 2021.
Earlier this year, Mele Kyari, group managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), had given an alarm that the Corporation could no longer bear the burden of underpriced sales of premium motor spirit (PMS), better known as petrol, to consumers in the country.
While speaking on the proposed plan to increase the price of petrol, Kyari stated that the decision was still on hold until government meets and decides with stakeholders.
“The price could have been anywhere between N211 and N234 to the litre. The meaning of this is that consumers are not paying for the full value of the PMS that we are consuming and therefore someone is paying that cost,” he had said.
“As we speak today, the difference is being carried in the books of NNPC and I can confirm to you that NNPC may no longer be in a position to carry that burden.”
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.”
Source: The Cable