From all indications, Nigeria appears to be in deeper economic problems as the Nigerian National Petroleum Corporation (NNPC) reported that it has recorded a shortfall in revenue of N111,966,456,903.74 in February 2021.
A source who cited a confidential memo sent to government agencies from the country’s apex fuel importer-supplier, said the NNPC was recording a shortage of N56 for every litre of PMS being imported into Nigeria currently. It said its shortfall came from the landing cost of fuel spiraling upward by “N184 per litre as against the subsisting ex-coastal price of N128 per litre” as the Federal Government and Labour were still negotiating the pump price of fuel.
The corporation, in a letter to the Accountant-General of the Federation, stated that the NNPC would therefore not be contributing to the FAAC for April and May. The letter dated April 26, and signed by the Chief Financial Officer, Umar Ajiya Isa, noted that the sum of N111,966,456,903.74 incurred as landing costs would be deducted from April 2021 Oil and Gas Proceeds due to the Federation in May 2021, which will translate to zero remittance to the Federation Account from NNPC in the month of May 2021.
Isa stated: “Further to our previous correspondences on the above subject, we wish to advise on the projected remittance to the Federation Account for the months of April (May FAAC) to June 2021 (July 2021 FAAC).
“The Accountant General of the Federation is kindly invited to note that the average landing cost of Premium Motor Spirit (PMS) for the month of March 2021 was N184 per litre as against the subsisting ex-coastal price of N128 per litre, which has remained constant notwithstanding the changes in the macroeconomics variables affecting petroleum products pricing.
“As the discussions between Government and the Labour are yet to be concluded, NNPC recorded a value short fall of N111,966,456,903.74 in February 2021 as a result of the difference highlighted above. Accordingly, a projection of remittance to the Federation for the next three months is presented in the attached schedule.
“Accordingly, the AGF is invited to note that the sum of N111,966,456,903.74 will be deducted from April 2021 Oil and Gas Proceeds due to the Federation in May 2021, which will translate to zero remittance to the Federation Account from NNPC in the month of May 2021.
“This is to ensure the continuous supply of Petroleum Products to the nation and guarantee energy security. Please accept the assurances of my highest regards.”
The letter was copied to the Minister of Finance, Budget, and National Planning, the Director General, Nigeria Governors Forum, the Director Home Finance and the Chairman, Commissioners of Finance Forum