26 May 2016, Sweetcrude, Abuja – Massive declines in the price of crude oil have impacted the monthly allocations from the Federation Account to the three tiers of government as the share for the month of April fell by N18.2bn to N281.5bn from N299.74bn in March, according to the Federation Account Allocation Committee.
The FAAC meeting for the month of April, which was held on Wednesday at the headquarters of the Federal Ministry of Finance in Abuja, confirmed a decline of N18.8bn in gross statutory revenue from N232.61bn in March to N213.81bn last month.
Speaking to journalists shortly after the meeting, the Minister of Finance, Mrs. Kemi Adeosun, blamed the drop in allocations to a huge decline in the prices of crude oil.
The minister said there was a revenue loss of $45.9m as a result of the drop in the average price of crude oil from $39.04 in December 2015 to $29.02 in January this year.
She added that a marginal drop in income was recorded from oil and gas royalty as well as import duty.
According to Adeosun, while oil production increased slightly between December 2015 and January 2016 despite explosions at the Escravos export terminal, the force majeure declared at the Brass terminal, shut-ins and shut-down of pipelines at other terminals for repairs and maintenance affected government revenues.
Adeosun said, “The gross statutory revenue of N213.81bn received for the month was lower than the N232.61bn received in the previous month by N18.8bn.
“There was a revenue loss of $45.9m as a result of the drop in the average price of crude oil from $39.04 in December 2015 to $29.02 in January 2016.”
In terms of allocations to the three tiers of government, the minister, who is also the chairman of the committee, said the decline in revenue had a negative impact on the amount shared.