The Nigerian National Petroleum Company Limited (NNPCL) has remitted N123 billion to the Federal Government.
According to reports, the company began the dividend payment into the federation account on Thursday, July 20.
The monies paid are part of the N907 billion shared by the Federal Account Allocation Committee (FAAC).
During the FAAC distribution meeting that was chaired by the Accountant General of the Federation, Dr Oluwatoyin Madein, the NNPCL remitted N123 billion to the government.
NNPCL paid N81 billion as a monthly interim dividend and N42 billion as a 40% production sharing contract (PSC) profit oil. This is in addition to compliance with the payment of royalties and taxes.
Nairametrics had previously reported that following the fuel subsidy removal, the Federal Accounts Allocation Committee (FAAC) has seen distributable revenue rise by over 100% for June 2023 to N1.9 trillion from N701 billion in May.
How was NNPCL able to remit N123 billion to the FG?
Before the removal of the fuel subsidy, the NNPCL had lamented that it was paying up to N400 billion monthly in fuel subsidy payments.
Mele Kyari the Group Chief Executive Officer of the NNPCL, said that the company could no longer make the payments as it was cutting into its profits.
Since the fuel subsidy was removed in May 2023, the company has been able to save money as it has stopped paying for fuel subsidies.
Savings from the fuel subsidy regime has made it possible for NNPCL to make dividend payments to the federation account.
Backstory
Before this time, the NNPCL had failed to remit money to the federation account and this situation had put the company at odds with FAAC.
FAAC had accused NNPCL of refusing to pay N2.1 trillion from crude sales, royalties, and taxes.
Meanwhile, NNPCL had said it was making fuel subsidy payments and was being owed by the Federal Government.
Recall that in February 2023, Mele Kyari told Channels Television in an interview, that the NNPCL is supposed to receive monthly allowances from the Ministry of Finance to finance fuel subsidies. but he wasn’t sure if this could be possible amid the country’s fiscal realities at the time.
In June 2023, President Bola Ahmed Tinubu set up an inter-agency committee to investigate the company’s failure to remit monies into the federation account.
What you should know
During the Tax Dialogue organized by the Kaduna State Revenue Service in November 2022, former Governor of Kaduna State, Nasir El Rufa’i said that the inability of NNPCL to remit monies to the federation account has put many states in distress.
He said:
- “This year, NNPC has not brought N20,000 to the federation account. We are living on taxes. It is PPTs, royalties, income tax, and VAT that are keeping this country going because NNPC claims that subsidy has taken all the oil revenues. I don’t believe it.”
