Between January and November this year, the Nigerian National Petroleum Corporation incurred a total under-recovery of N623.16bn.
Details of the under-recovery are contained in a document presented by the corporation to the Federation Account Allocation Committee.
The Nigerian National Petroleum Corporation is currently subsidising Premium Motor Spirit, popularly known as petrol, through its under- recovery arrangements.
Although the corporation insisted that it was not paying subsidy on petrol as it had no parliamentary approval for such, it revealed through the document presented to FAAC that what the NNPC had incurred as under-recovery in 11 months was N623.16bn.
The committee, headed by the Minister of State for Finance, Mrs Zainab Ahmed, is made up of commissioners of finance from the 36 states of the federation; the Accountant General of the Federation, Alh Ahmed Idris, and representatives from the Nigerian National Petroleum Corporation.
Others are representatives from the Federal Inland Revenue Service, the Nigeria Customs Service, Revenue Mobilisation, Allocation and Fiscal Commission and as well as the Central Bank of Nigeria.
The federation account is currently being managed on a legal framework that allows funds to be shared under three major components-statutory allocation, Value Added Tax distribution, and allocation made under the derivation principle.
Under statutory allocation, the Federal Government gets 52.68 per cent of the revenue; states, 26.72 per cent; and local governments, 20.60 per cent.
The framework also provides that Value Added Tax revenue should be shared thus: FG, 15 per cent; states, 50 per cent; and LGs, 35 per cent.
Similarly, an extra allocation is given to the nine oil producing states based on the 13 per cent derivation principle.
In the presentation dated December 19, which was presented to FAAC members, the corporation stated that apart from the N623.16bn, there were also arrears of N67.23bn, bringing the total amount to N676.49bn.
Out of the N676.49bn, the sum of N599.74bn was incurred as under-recovery under the Direct Sales Direct Purchase arrangement while the sum of N23.43bn was under-recovered from its refinery.
A further breakdown of the N623.16bn under-recovery showed that the sum of N51.24bn was incurred in January while February, March and April recorded N58.66bn, N36.09bn, and N82.4bn respectively.
In the month of May, the amount of under-recovery incurred by the NNPC on PMS dropped to N36.87bn. It, however, rose to N53.41bn in June, N52.43bn in July and N63.18bn in the month of August.
The amount incurred as under-recovery by the corporation went up to N71.8bn in the month of September before dropping down to N51.18bn and N65.86bn in the months of October and November respectively.
The report stated that the amount incurred by the NNPC as under-recovery was deducted from the Federation Account thus: January, N45.78bn; February, N59.51bn; March, N34.03bn; April, N77.9bn; and May, N88.9bn.
The month of June saw the corporation deducting about N68.6bn while July, August, September, October and November recorded deductions of N52.5bn, N60.6bn, N71.56bn, N51.18bn and N65.86bn in that order. – Punch.
