Lower oil prices, sabotage reduce revenue shared by federal, states, local govt by N36 billion

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File photo of Nigerian Governors at the Presidential Villa

Nigeria’s distributable government revenues fell to N429.127 billion naira in February from N465.19 billion in January due to lower oil prices and other factors, PREMIUM TIMES understands.

A statement by the Office of the Accountant General of the Federation said that the fall in revenue was equally compounded by sabotage of the nation’s oil pipelines by Niger Delta militants.

Distributable revenue is government income that is shared at various levels of state including the federal government, state governments and local government councils.

Average oil prices, the statement said, fell to $44.74 from $49.57 per barrel in February.

“Production diminished during the period due largely to leakages in the pipelines arising from sabotage,” the statement signed by Kenechukwu Offie stated. “Also the force Majeure declared at Forcados and Brass Terminals lingered.”

Nigeria, an OPEC member, which last year entered its first recession in a quarter of a century, relies on crude oil sales for two-thirds of its government revenue.

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The nation has, however, been hit hard by the fall in global crude prices since mid-2014.

Militants have carried out attacks on oil and gas facilities in the southern Niger Delta energy hub for a year, cutting oil production, which stood at 2.1 million barrels per day at the start of 2016, by as much as a third.

Output has since mostly been recovered, following dialogues with the aggrieved pipeline attackers.

Attacks have halted in recent months with talks between the government and Delta community leaders to address the grievances of militants.

The militants want the oil hub to receive a greater share of the country’s energy wealth and have since been agitating to press their demands, leading to attacks on the nation’s oil installations.

According to the statement, the communiqué issued by the technical sub-committee of Federation Accounts Allocation Committee, FAAC, at the end of the meeting held on Tuesday in Abuja, indicated that the gross statutory revenue received for the month is N290.163 billion, lower than the N324.990 billion received in the previous month.

The shared amount comprised the month’s statutory distributable revenue of N258.692 billion, Value Added Tax of N69.207 billion, exchange gain of N40.329 billion and Excess PPT Account of N60.899 billion.

There was also a N6.330 billion refund to the federal government by Nigerian National Petroleum Corporation, NNPC.

Accordingly, from net statutory revenue, the federal government received N117.581 billion representing (52.68 per cent); states received N59.639 billion (26.72 per cent); local government councils received N45.979 billion representing (20.60 per cent); while the oil producing states received N23.191 billion as 13 per cent derivation revenue.

Furthermore, from the revenue available from the Value Added Tax (VAT), the federal government received N9.966 (15 per cent); states received N33.220 billion (50 per cent) while the local government councils received N23.254 (35 per cent).

The communique further revealed that there was a revenue increase of $4.06 million in federation export sales due to a rise in the crude oil export volume by 0.30 million barrels.

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