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HomeTop NewsNNPC to deduct N114 bln from expected revenue remittance to federation account...

NNPC to deduct N114 bln from expected revenue remittance to federation account in June

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The Nigerian National Petroleum Corporation (NNPC) to deduct N114.2 billion from expected revenue remittance to the federation account in June due as the landing cost of imported petrol for local consumption ballooned.

The amount to be deducted from the June revenue was, however, was lower than the N126.2 billion deducted from the accrued revenue in May by the state-owned oil giant.

Presently, the NNPC continue to fund the subsidy on local consumption of petrol and this impacted the revenue remittance to the federation account which is shared among the three tiers of government under the Federation Account Allocation Committee (FAAC).

The landing cost of Premium Motor Spirit being imported into Nigeria surged by more than 60 per cent between December 2020 and mid-June this year.

From an average of N143.60 per litre in December, the landing cost of petrol rose to N231.98 per litre on June 16 this year on the back of the rally in global oil prices.

In a presentation by the corporation to the FAAC, on June 22, the data showed that under-recovery or subsidy claims deducted from oil revenues by the NNPC amounted to N25.374 billion in February, N60.396 billion in March and N61.966 billion in April. But it rose astronomically to N126.298 billion in May before falling to N114 billion in June.

However, the NNPC remitted a marginal net sum of N29.647 to FAAC in May, which was shared in June, as opposed to its zero contribution in April, its N90.860 billion in January, N64.161 billion in February and N41.184 billion in March.

The national oil company managed to remit about N29 billion from its finances to the joint account in May, which was part of the revenue distributed among the three tiers last week.

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What the NNPC has termed under-recovery is the difference between the actual market rate of petrol and the price at which the commodity is sold at the pump, which the federation bears in order to keep the pump price stable at N162 per litre.

According to the presentation, the NNPC has been able to contribute a net sum of N225.85 billion to the federation for the year, out of its yearly projected remittance of N1.473 trillion and monthly value addition of N122.7 billion, leaving a variance of N820.684 billion.

The document showed that for April, crude oil and gas sales and receipts, available in May and shared in June, the volume of export crude oil stood at 2.78 million barrels with a monetary value of $181.191 million and the equivalent of N69.360 billion, while domestic crude oil due in July was 6.63 million barrels and sold at $434.8 million. Added to export crude oil, the revenue generated was $616.037 million.

Last week, NNPC told the nation that Nigeria now loses about 42 million litres of petrol to smuggling through the country’s borders, increasing Nigeria’s estimated daily consumption of 60 million litres to 103 million litres.

With the menace now gaining more momentum and illegal dealers more daring, the national oil company stated that the under-recovery or the subsidy that the government pays on the product every month has begun to hover between N140 billion to N150 billion.

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