July FAAC: NNPC Deducts 175 billion Subsidy From Source

By Uche Mbah

The Nigerian National Petroleum Corporation (NNPC) has resorted to deducting Petroleum subsidy before sending the monthly allocations for disbursement.

This is to beat the fact that Fuel Subsidy is no longer captured in the Budget.

Last July, the Corporation said it had spent N175.32 billion on petrol subsidy which is expected to  be deducted from its remittance to Federation Account Allocation Committee (FAAC) in September.

According to the NNPC, an outstanding amount of N40 billion will be deducted also, making a total deductions of N215.32 billion from the FAAC account.

“Out of the value shortfall of N143.29 billion, the sum of N103.29 billion was tiptoe Gross Domestic receipts before arriving at the net receipt of N67.28 billion in order to make funds available for JV cost recovery to sustain the existing production level. The balance of N40 billion will be deducted in subsequent months”, said the report.

“The July, 2021 value shortfall ofN175.32 billion and outstanding balance of N40 million will be deductible from the August, 2021 proceeds due for sharing at the September, 2021 FAAC meeting”.

Despite measures put in place, petroleum products are still being smuggled from Nigeria to neighboring countries, resulting in rise in the price of local consumption

NNPC’s Group Managing Director, Mele Kyari, had in June claimed that daily petrol consumption had risen to 102 million litres per day, driven largely by smuggling of the product from Nigeria to neighboring countries.

Recently, the Group Managing Director, NNPC, had expressed fears that this smuggling will continue as long as fuel is cheaper in Nigeria than in deregulation countries.

Meanwhile, Marketers are not preventing pushing for the total deregulation of the downstream sector where Market forces will determine prices.