NNPCL’s Stable Excess Crude Amount Over Previous Years

The amount in the Excess Crude Account has remained stable at around $474 million over the previous two years despite the Nigerian National Petroleum Company Limited remitting N907 billion to the Federal Account Allocation Committee.
The NNPCL restarted payments to FAAC in June after a three-month hiatus owing to high fuel subsidy costs.
According to a communiqué published at the end of the FAAC meeting for July 2023, NNPCL stated that the balance in the surplus crude account as of June 2023 was $473,754, the same amount in the purse as of December 15, 2022, while it paid N907.054bn into the FAAC purse.
Dr Oluwatoyin Madein, the Federation’s Accountant General, presided over the meeting.
The Federal Government got N345 billion, the State Governments around N296 billion, and the Local Government Councils about N218 billion from the total distributable revenue of N907 billion.
The relevant states received a total of N47 billion as a 13 percent derivation income share.
Bala Zaka, an energy specialist, called the trend “very dangerous and negative.”
The ECA is an account designed to hold any surplus revenues generated whenever the government sold crude oil at a price greater than the benchmark set forth in the budget.
For instance, if the benchmark price for crude oil was $70 per barrel and the product sold for $75 per barrel, the extra $5 would be set aside for emergencies.
Nigeria set the benchmark price for crude oil for 2023 at $75 per barrel, while worldwide Brent prices rose to $82 per barrel last week before falling to $80 per barrel as of Friday.
It is important to remember that Nigeria’s oil grade, Bonny Light, sells for +$1 more than dated Brent and is typically favoured by foreign refiners.
In the previous eight years, the account had decreased by 89%, going from $4.1 billion in November 2014 to $472,513 in the same time in 2022.
Sheriffdeen Tella, an economist at Olabisi Onabanjo University in Ogun State, claimed that the government’s discipline was to blame for the sad circumstance.
“You will recall that the Governors’ Forum kicked against the account claiming it is their money and the Federal Government has no right to deny them of its use.
NNPCL said it also remitted N123bn (N81bn as monthly interim dividend and N42bn as 40% Production Sharing Contract on profit oil), in addition to complying with the payment of royalties and taxes, in a separate statement issued by the company’s chief financial officer, Umar Ajiya.
Ajiya didn’t say how much it spent on royalties and taxes.
“This clearly shows that the company under the leadership of Mallam Mele Kyari is moving in a positive trajectory as enshrined in the PIA,” the statement said.

Source: Allnews Nigeria

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