CONCERNS AS NNPC RECORDED ZERO REMITTANCE TO FEDERATION ACCOUNT IN JANUARY

The Nigerian National Petroleum Company (NNPC) Limited failed to return its required funding to the Federation Account, which is jointly controlled by the federal, state, and local governments, in January 2022, despite increased worldwide of prices.

The national oil corporation (NOC) was unable to deliver a kobo to the joint account for the second time in less than a year, following the same incident in April of last year, when the firm claimed zero remittance for the month.

Furthermore, according to a paper documenting NNPC's actions for the month under review, which was given to the Federation Account Allocation Committee (FAAC) on Thursday, the NOC spent a whopping N210.38 billion on fuel subsidy for the month.

Recall that with a deficit of approximately N2 trillion out of its projected N2.511 trillion, the NNPC was unable to remit roughly 80 percent of its projected contribution to the Federation Account in 2021.

For the entire 12 months of last year, the NNPC disbursed N542 billion as against the budgeted N2.511 trillion, despite a monthly contribution estimate of N209.3 billion The N542 billion represented just about 21.6 percent of the total expected contribution of the NNPC to the joint account.

The development underscored how a combination of factors, including declining of production rising subsidy payments, and high oil production costs, have hobbled the organization's performance despite the increasing oil prices which overshot $105 per barrel last week.

Earlier in the year, President Muhammadu Buhari had back tracked on the planned full deregulation of the downstream sector, including the wholesale removal of petrol subsidy, citing the negative impact it would have on the poor in the country.

For decades, Nigeria's attempt to fully free the downstream oil and gas industry has met with a brick wall. The latest effort has also been pushed forward by about 18 months, effectively exempting the current administration which will exit by May 2023 from any burden.