NNPCL’s Troubling Revenue Discrepancy: N13.270 Trillion Unaccounted For

A recent report by the Federation Account Allocation Committee (FAAC) has raised concerns about the Nigerian National Petroleum Company Limited (NNPCL) regarding the sale of crude oil and remittances to the federation’s account. According to the report, the NNPCL sold crude oil valued at N26.496 trillion but only remitted N13.226 trillion to the federation’s account, withholding N13.270 trillion that should have been deposited.

This revelation covers a significant period, from January 2012 to May of the current year. Additionally, the report highlighted that the FAAC had certified subsidy claims totaling N4.026 trillion, a process carried out by the Petroleum Products Pricing Regulatory Agency (PPPRA) from January 2010 to December 2015. Notably, there have been no subsidy claims certified by the FAAC since that period.

Efforts to obtain a response from the NNPCL regarding the report were unsuccessful as they did not respond to text messages and emails.

The report also disclosed financial transactions made by the NNPCL, including dividend payments and transfers of crude oil revenue into the federation account with the Central Bank of Nigeria (CBN). The report raised questions about the nature of a $158.17 million fund transfer to the federation account made by the NNPCL in August, as the purpose of this transfer was not disclosed.

The federation revenue account, where differences between total revenue realized and what is shared at FAAC meetings are saved, has accumulated substantial balances. This development follows President Bola Tinubu’s announcement of the cessation of petroleum subsidy payments on May 29. As of the latest available data, the balances in the federation revenue account stood at N1.56 trillion, underscoring the government’s determination to save funds that would have been allocated to oil marketers as subsidy.

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The federation revenue accounts encompass various income sources, including non-oil revenue, oil revenue, Value Added Tax (VAT), and Electronic Money Transfer Levy (EMTL). This diversification of revenue streams indicates the government’s commitment to reducing reliance on a single sector, fostering a more resilient and sustainable economy. The Federal Government has made significant strides in expanding its revenue base by exploring non-oil sectors such as agriculture, manufacturing, telecommunications, and services.

The savings resulting from the cessation of petroleum subsidy payments have contributed to the federation revenue accounts, reflecting the government’s strategic management of the oil sector and adherence to prudent economic policies. VAT has also emerged as a reliable source of income for the federation revenue accounts, enabling the government to finance essential development projects and address national priorities.

An essential component of the federation revenue accounts is the Electronic Money Transfer Levy (EMTL), which has proven efficient and transparent. By imposing a levy on electronic money transfers, the government has tapped into the growing digital payment ecosystem, benefiting from the increasing popularity of cashless transactions in Nigeria. These developments highlight the evolving financial landscape in Nigeria and the government’s efforts to diversify revenue sources for the benefit of its citizens.

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