Surplus Crude Account Unchanged Despite NNPCL's FAAC Payout of NNPCL 907 Billion
The surplus crude account balance has remained stagnant at around $474 million for the past two years, despite the payment of N907 billion to the Federal Accounts Allocation Committee by the Nigerian National Petroleum Company Limited.
The NNPCL had resumed remittances to FAAC in June after failing to do so due to huge fuel subsidy spending.
According to a statement released at the end of the July 2023 FAAC meeting, seen by The PUNCH, NNPCL said the surplus crude account balance was $473,754 in June 2023, the same amount in the exchange as of December 15, 2022, when it paid N907.054 billion into the FAAC exchange.
The meeting was chaired by the Accountant General of the Federation, Dr. Oluwatoyin Madein.
Of total distributable income of N907 billion; the federal government received 345 billion naira, state governments received about 296 billion naira and local government councils received 218 billion naira. A total sum of N47 billion has been shared with the affected states as 13% diversion revenue.
Energy expert Bala Zaka described the trend as "very dangerous and negative".
The ECA is an account created to save the additional funds generated whenever the country sold crude oil at a price above the benchmark approved in the budget.
For example, if the crude oil benchmark was $70 per barrel and the raw material sold for $75 per barrel, the excess $5 was saved for rainy days.
While Nigeria had set the crude oil price for 2023 at $75 a barrel, international Brent rose to $82 a barrel last week before falling to $80 a barrel on Friday. It should be noted that the Nigerian crude grade, Bonny Light, generally preferred by international refiners, sells for +$1 above dated Brent.
The account has shrunk 89% over the past eight years, from $4.1 billion in November 2014 to $472,513 in the same period of 2022.
Professor of Economics at Olabisi Onabanjo University, Ogun State, Sheriffdeen Tella said the unfortunate situation happened due to government discipline.
"You will recall that the Governors Forum kicked the account saying it is their money and the feds have no right to deny them its use.
"So if money is moved into such an account now, the same argument will arise. It is a global practice, but Nigerian governments are undisciplined. Many are still out for money to steal; live big, amass personal wealth and remain greedy."
In a separate statement released by NNPCL Chief Financial Officer Umar Ajiya, the company said it has also paid N123 billion (N81 billion as a monthly interim dividend and N42 billion as a 40% production sharing contract on profit oil) in addition to compliance with the payment of royalties and taxes.
Ajiya did not disclose how much she paid in taxes and fees.
“This clearly shows that the company under the leadership of Mallam Mele Kyari is moving in a positive trajectory as enshrined in the PIA,” the statement read.
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The surplus crude account balance has remained stagnant at around $474 million for the past two years, despite the payment of N907 billion to the Federal Accounts Allocation Committee by the Nigerian National Petroleum Company Limited.
The NNPCL had resumed remittances to FAAC in June after failing to do so due to huge fuel subsidy spending.
According to a statement released at the end of the July 2023 FAAC meeting, seen by The PUNCH, NNPCL said the surplus crude account balance was $473,754 in June 2023, the same amount in the exchange as of December 15, 2022, when it paid N907.054 billion into the FAAC exchange.
The meeting was chaired by the Accountant General of the Federation, Dr. Oluwatoyin Madein.
Of total distributable income of N907 billion; the federal government received 345 billion naira, state governments received about 296 billion naira and local government councils received 218 billion naira. A total sum of N47 billion has been shared with the affected states as 13% diversion revenue.
Energy expert Bala Zaka described the trend as "very dangerous and negative".
The ECA is an account created to save the additional funds generated whenever the country sold crude oil at a price above the benchmark approved in the budget.
For example, if the crude oil benchmark was $70 per barrel and the raw material sold for $75 per barrel, the excess $5 was saved for rainy days.
While Nigeria had set the crude oil price for 2023 at $75 a barrel, international Brent rose to $82 a barrel last week before falling to $80 a barrel on Friday. It should be noted that the Nigerian crude grade, Bonny Light, generally preferred by international refiners, sells for +$1 above dated Brent.
The account has shrunk 89% over the past eight years, from $4.1 billion in November 2014 to $472,513 in the same period of 2022.
Professor of Economics at Olabisi Onabanjo University, Ogun State, Sheriffdeen Tella said the unfortunate situation happened due to government discipline.
"You will recall that the Governors Forum kicked the account saying it is their money and the feds have no right to deny them its use.
"So if money is moved into such an account now, the same argument will arise. It is a global practice, but Nigerian governments are undisciplined. Many are still out for money to steal; live big, amass personal wealth and remain greedy."
In a separate statement released by NNPCL Chief Financial Officer Umar Ajiya, the company said it has also paid N123 billion (N81 billion as a monthly interim dividend and N42 billion as a 40% production sharing contract on profit oil) in addition to compliance with the payment of royalties and taxes.
Ajiya did not disclose how much she paid in taxes and fees.
“This clearly shows that the company under the leadership of Mallam Mele Kyari is moving in a positive trajectory as enshrined in the PIA,” the statement read.
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