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Published On: Tue, Jul 24th, 2018

Oil revenue remittances shortfall

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For the third time in 2018, the monthly meeting of Federation Account Allocation Committee for sharing oil revenues between the three tiers of government (federal, state and local ) was deadlock on penultimate Wednesday in Abuja. The failure of the committee to disburse the quotas for the month of May this year was due to observed discrepancies in the funds remitted by the National Petroleum Corporation (NNPC) to the federation account. The 36 states’ commissioners for finance and the FCT left the meeting in annoyance.

Chairman, Finance Commissioners’ Forum, Mr. Mahmood Yunusa, said members of the committee would go back and confer with the state governors. But the Director Press, Ministry of Finance, Mr. Hassan Dodo, said that the meeting would be reconvened before the end of the week. We are in July now and there is no indication that it would do so any time soon.

The NNPC claims it remitted N147 billion in June. However, the governors asked for N40 bn more. According to the state oil monopoly, the extra request by the governors was against the terms of the agreement it had with them on the matter. The disbute over differentials in figures from oil sales surfàced few months ago. Following this latest deadlock, the minister of finance, Mrs. Kemi Adeosun, warned that the states might not be able to pay last month’s salaries of their workers.

The purported agreement between NNPC and the state governors, according to the corporation’s spokesman, Mr. Ndu Ughamadu, allowed NNPC to remit the funds. The corporation said it reached an agreement with the governors that it would make a monthly payment of N112 billion to FAAC, “subject to sufficient funds from sales of domestic crude oil allocation for the corresponding month after meeting cash call obligations on joint venture operations, as well as deductions of petrol-cost under recovery and pipeline maintenance”. These “costs” were disputed by the governors, leading to the present deadlock.

We, at Peoples Daily, urge for a quick intervention by President Muhammadu Buhari, who also doubles as petroleum resources minister, on this matter so that states do not again begin to pile up arrears of salaries of public service workers. Why this must not be allowed to happen is to prevent state governors from coming back to him to ask for a bailout to pay salaries. Since 2015 when he took office, Buhari has paid two bailouts to the state governments for that purpose. The finance minister said during the weekend that Buhari had agreed to intervene to resolve the impasse. Good.

However, we dare say this matter calls for, not dialogue with the hot heads at NNPC, but a forthright order for them to behave themselves this time. In other words, the wings of NNPC must be clipped. We have had enough of its shenanigans. Erstwhile President Goodluck Jonathan was too polite to the oil oligarchs at NNPC, and the result was they undermined his government. Buhari must not make the same error. The NNPC must revert to its place as a department of the Federal Government of Nigeria, and not continue to run as a parallel government to which must Nigeria must go cap in hand.

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