Nairametrics| The Minister of Finance, Kemi Adeosun, said the Federal Government had shared N429.127 billion as for February’s FAAC allocation amongst the Federal, State and Local governments; this is N36.063 billion less than January’s allocation.
The Federal Government got N117.58 billion, states N59.63 billion and local governments N45.98 billion. N23.1 billion was given to the oil producing states under the 13 per cent derivation principle.
The minister highlighted lower oil prices and sabotage as the main causes of lower FAAC allocation for February. She said that average oil prices fell from $49.57 to $44.74 per barrel in February, therefore reducing the total amount the government made in sales.
She also mentioned that production diminished mainly because of leaks to pipelines as a result of sabotage by some militants, thereby reducing the quantity of oil the government was able to sell. Further, the Force Majeure declared at Forcados and Brass Terminals still lingers. Adeosun also added that there was a significant decrease in revenue from Petroleum Profit Tax, Companies Income Tax, Import and Excise duties and oil royalty, which also impacted total revenue.
With lower allocations for February, some states will find balancing their budgets difficult. Currently, on average, FAAC allocations represents between 30 – 40% of the monthly budget of majority of the states. With no alternative means of income, will states require another bail out soon?