NNPC speaks on FAAC revenue sharing controversy

The Nigerian National Petroleum Corporation (NNPC) on Thursday said it did nothing wrong with the amount it deposited for distribution to the three tiers of government in June.

The corporation was responding to the decision of the Federation Accounts and Allocation Committee (FAAC) not to share the available money during its meeting on Wednesday allegedly because the NNPC did not remit sufficient funds.

On Wednesday, the FAAC meeting ended in Abuja in confusion with members refusing to share allocations for the month.

No member of the committee agreed to talk to journalists as they hurriedly left the auditorium of the finance ministry, venue of the meeting.

However, PREMIUM TIMES had reported overhearing one of the commissioners lamenting on telephone in his conversation with a caller, hinting at the reason the meeting ended in a stalemate.

In the conversation, he blamed the situation on NNPC’s refusal to remit sufficient revenue to FAAC.

But, in a statement issued by NNPC’s spokesperson, Ndu Ughamadu, and sent to PREMIUM TIMES, the corporation said the N147 billion revenue remitted to FAAC for sharing to the three tiers of government in June was “in line with the terms of agreement it had with governors on the matter.”

Mr Ughamadu said the agreement NNPC had with the governors was that the corporation would make a monthly remittance of N112billion only to FAAC.

He said the remittance was subject to sufficient funds from its sales of domestic crude oil allocation for the corresponding month after meeting cash call obligations on Joint Venture (JVs), deductions of Premium Motor Spirit (PMS)-cost under recovery and pipeline maintenance.

The NNPC spokesperson said the NNPC was able to surpass the terms of agreement with the governors on the monthly remittance for the month of June by N35 billion, having taken a cue from their postures, by taking from the sum meant for settling cash call obligations.

“The corporation regretted the governors’ additional request of N40billion. It was unfortunate, given the fact that NNPC is set to exit the cash call phenomenon,” Mr Ughamadu said in the statement.

Following the abrupt end of the meeting on Wednesday, the chairman of the Commissioners of Finance Forum of FAAC, Mahmoud Yunusa, told reporters members were breaking to go to enable them go and consult with their principals – the state governors – on the next line of action.

It is not clear when the committee would reconvene to conclude the meeting, which was attended by Commissioners for Finance and Accountants General from the 36 states of the federation and the Federal Capital Territory.

Since February this year, FAAC meetings have ended in a stalemate, with members always accusing the NNPC of remitting insufficient revenue for sharing.

After the meeting ended in confusion in February, it took the intervention of the finance minister, Kemi Adeosun, and the vice president, Yemi Osinbajo to settle the matter.

At the end, representatives of the states and the FCT agreed to reconvene the following day and share the N647.39 billion that was available for sharing.

But, officials of the committee and those of the finance ministry and the Office of the Accountant General of the Federation have always been reluctant to disclose to the public, agreements they had, at the end of such reconciliation meetings.

After the fiasco in February, the finance ministry officials said a conciliatory meeting was convened with the top hierarchy of NNPC to reconcile the revenue shortfall.

However, since then, no report has been issued by any of the parties to the meeting on what transpired.

At the end of the FAAC meeting last month, Permanent Secretary, Federal Ministry of Finance, Mamhoud Dutse, parried a question by PREMIUM TIMES reporter who sought to know the outcome of the conciliatory meetings.

He said there was nothing unusual with the scrutiny by the committee members of the revenues returned by the NNPC.