Company to deduct N270.83bn from FAAC same month
A total of N249.3bn for October 2021 domestic crude oil sales by six multinational oil companies operating in the upstream sector will be paid in January 2022, the Nigerian National Petroleum Company Limited has said.
The NNPC made this known in its latest report on Nigeria’s crude oil export and domestic crude oil sales in the month of October 2021. The report was obtained in Abuja on Thursday.
This came as the oil firm revealed that it would also deduct N270.83bn from what would be shared by the three tiers of government during the Federal Accounts Allocation Committee meeting in January next year.
It said the N270.83bn was its November 2021 value shortfall. The NNPC posts value shortfalls as a result of what it spends on the monthly subsidy of Premium Motor Spirit, popularly called petrol.
On oil sales, it explained in the report that while the October 2021 crude oil exports of 50,000 barrels under Production Sharing Contract, valued at $4.18m was payable in November 2021, the October 2021 domestic crude oil payment expected in January 2022 from the six firms is N249.3bn.
The company further noted that the October 2021 domestic crude oil payable in January 2022 by the NNPC was in line with the 90 days payment terms, adding that the six firms were its Joint Venture partners.
It outlined the firms from where the funds were being expected to include Chevron Nigeria Limited, Mobil Producing Nigeria, Shell Petroleum Development Company, MidWestern, Pillar and First Exploration and Production.
It said CNL would be paying for 2.268 million barrels of domestic crude valued at N73.85bn, while MPN would remit N123.22bn for 3.8 million barrels of domestic crude oil.
The SPDC and MidWestern would be paying for 828,556 and 100,000 barrels of domestic crude oil valued at N26.966bn and N3.25bn, respectively.
For Pillar and First E&P, the firms would pay for 20,000 and 649,677 barrels of domestic crude oil valued at N650.91m and N21.36bn, respectively.
The report put the total volume of domestic crude oil payable by the firms in January 2022 at 7.666 million barrels, while the value of the commodity was put at N249.3bn.
On the N270.83bn deduction from what would be shared by FAAC in January 2022, the NNPC stated that the amount was an estimate of its value shortfall in November this year.
It said, “The estimated value shortfall of N270,831,143,856.56 is to be recovered from the December, 2021 proceed due for sharing at the January 2022 FAAC meeting.
“This value shortfall consists of N220,110,853,427.56 for November and N50,720,290,429.00 deferred for recovery in December 2021 FAAC Report.”
The NNPC had been posting value shortfalls on a monthly basis due to its spendings on petrol subsidy, a development that had consistently reduced its remittances to FAAC.
State governors had kicked against the continued subsidy on petrol by the NNPC, but experts and labour unions cautioned the government to be careful as it considers a halt in the PMS subsidy regime.
The NNPC has remained the sole importer of petrol into Nigeria for about four years running and has been shouldering the cost of the PMS subsidy, being the provider of last resort.
Other oil marketers stopped the importation of petrol due to the instability in the country’s foreign exchange rate and the inability of marketers to efficiently access the United States dollar for PMS imports.