…Excess crude balance falls to $3.03bn
27 August 2016, Sweetcrude, Abuja – The Federal government has disclosed that the monthly distributable revenues to the three tiers of government fell in July to around N443.6 billion after N559 billion recorded in June as militant attacks hit oil revenues.
Attacks by vandals, notably Niger Delta Avengers, on crude oil pipelines and other facilities, accounted for nearly 50 per cent loss of revenue to the three tiers of government in July.
The Minister of Finance, Mrs Kemi Adeosun said that N443.6 billion was shared among the federal, states and local governments as revenue realised in July.
Adeosun, who was represented by the Permanent Secretary, Mr Mahmoud Isa-Dutse, announced this while addressing newsmen on the outcome of the Federation Accounts Allocation Committee (FAAC) meeting.
The Minister noted that the amount is 11 per cent less than the N559 billion that was distributed in July.
“The distributable statutory revenue for the month is N268.7 billion. The sum of N6.3 billion was refunded to the Federation Account by Nigerian National Petroleum Corporation (NNPC).
“There is a distribution of N1.3 billion excess bank charges recovered from 2008 to 2012. Also, there was the exchange gain of N70 billion for the current month and N36.4 billion arrears for May which were also proposed for distribution.”
The meeting, attended by representatives of the federal and 36 states and Federal Capital Territory, Abuja, also reported a cut of about 2.8 million barrels in crude oil exports volume for April.
The minister attributed the huge cut to the subsisting force majeure declared at Forcados Oil terminal by oil companies.
Parties in a contract — in this case, oil firms — can declare force majeure when they are unable deliver on contractual obligations, due to unforeseen developments.
“The decrease was as a result of shut-in and shut-down of pipelines at other terminals due to the activities of vandals and for maintenance impacted negatively on production,” Adeosun explained.
Despite the increase in average price per barrel of crude oil at the international market in March from $38.64 to $42.21 in April, he said revenue accrual in the Federation Export Revenue decreased by $102.17 million.
Although revenues from non-oil sources declined from N279.16 billion in June to N168.41billion in July, the meeting reported a marginal increase in import duty during the month.
Giving the breakdown of revenue among the three tiers, the minister said the Federal Government received N129.2 billion, representing 52.68 per cent while states got N65.5billion, representing 26.72 per cent.
The local governments, she said, received N50.5 billion, amounting to 20.60 per cent of the amount distributed.
She said N12.8 billion, representing 13 per cent derivation revenue was shared among the oil producing states.
Adeosun also said that during the month under review, the country generated N119.4 billion as mineral revenue and N168.4 billion as non-mineral revenue, showing a decrease of N250.9 billion from both sources.
The minister said that the country’s Excess Crude Account stood at 3.03 billion dollars.
She explained that the main cause of the decline in revenue was mainly attributable to the reduction in the quantity of petroleum sold due to the activities of vandals in the Niger Delta.
Adeosun also said that Lagos State had not started receiving the 13 per cent derivation from the sale of crude oil.
“Lagos state has not started receiving the 13 per cent derivation because the money has not started coming in yet; it is after the actual export that the money would be realised and it would be given the derivation.”
The Accountant General of the Federation (AGF), Mr. Ahmed Idris, in his report said the performance of Companies Income Tax (CIT) and Petroleum Profit Tax (PPT) declined drastically due to the filing of the actual annual returns by joint venture companies.
Idris also attributed it to payments made during the month, with taxes paid by blue chip companies not captured under the month, because they were made before the June 30, 2016 deadline.
The AGF said distributable statutory revenue for the month stood at about N268.8 billion, apart from about N66.99 billion from value added tax (VAT) and N6.33 billion refunded by the Nigerian National Petroleum Corporation (NNPC) to the Federal government.
The refund was part of the N450 billion oil revenues from crude oil sales between 2010 and 2011 withheld by the NNPC from the Federation Account.
Mr. Idris said the federal government was yet to commence deducting bailout funds given to states, except those with various loan obligations to fulfil with commercial banks.
He said the debt sustainability programme of the government established to help states restructure their debts was still available for them to take advantage of.
Other revenues accruals during the month, the committee said, included about N1.37 billion excess bank charges recovered from commercial banks between 2008 and 2012.
Another N70.04 billion was realised as exchange gain as a result of exchange rate differentials between naira and the dollar, in addition to about N36.49 billion arrears for May proposed for distribution.