The Nigerian National Petroleum Company (NNPC) Limited has stated that it will reconcile subsidy deductions with the federation, following a request from the Federation Account Allocation Committee (FAAC) to refund over N2.1 trillion to the federation account. In a tweet, NNPC Limited clarified that it has been making petrol subsidy payments to marketers since 2016 when it became the sole importer of petrol, but it announced that it will no longer be the sole importer of petroleum products.
FAAC documents reveal that due to deductions for subsidy payments, NNPC had zero contribution to the federation revenue account in the reviewed month. Subsidy payments for petrol from January to June 2022 amounted to N1.5 trillion, while the cumulative deductions between January and November 2022 reached a total sum of N3.3 trillion.
FAAC accused NNPC of withholding substantial funds from the government between January and March. However, NNPC has not yet made the refund, citing that the Petroleum Industry Act (PIA) does not permit it to do so. The PMSC report submitted to FAAC indicates that NNPC is requested to net-off the sum of N1.4 trillion from the total subsidy payment, leaving a balance owed to the federation account of N2.1 trillion as of March.
Opinion: The reconciliation of subsidy deductions between NNPC and the federation is crucial for transparency and accountability in the petroleum sector. The proper management and utilization of funds derived from subsidy payments are essential to ensure that they are directed towards developmental projects and the well-being of Nigerians. The implementation of the Petroleum Industry Act should be closely monitored to determine its effectiveness in addressing subsidy-related issues and promoting efficiency in the petroleum industry.