Federal Account Allocation Committee has criticised the Nigerian National Petroleu͏m Company (NNPC) for an additional N1.19 trillion subsidy refund for July 2024.
The critique came shortly after NNPC noted that the request for additional subsidy refund was due to exchange rate differences which mostly impact the cost of imports, prices, and sales values of petrol.
NNPC emphasised that the country’s struggling economic growth puts pressure on government funds, and raises doubts about the lasting nature of the partial subsidy removal.
Moreover, a FAAC Postmortem Sub-Committee report revealed that in June 2024, the NNPCL claimed that the exchange rate differentials stood at N4.56tn as of June 2024 (due to under-recovery on petrol imports between August 2023 and June 2024), but this figure increased to N5.31tn by July 2024, an indication of unjust figure.
Therefore, the Federal Commissioner of the Revenue Mobilisation, Allocation, and Fiscal Commission emphasised that the omission of details made it difficult for the Sub-Committee to justify the figures submitted.
The Sub-Committee also noted that this amount had not been included in earlier FAAC reports and was therefore not recognised in its deliberations.
“As of June 2024, the Exchange Rate Differentials stood at N4,558,597,379,030.6. This amount increased to N5,309,418,715,637.13 as of the July 2024 Federation Account,” FAAC’s report revealed
“Note that NNPCL’s request for the application of Weighted Average Rate covers the period August to June 2024. Also, recall that all outstanding payments against NNPCL as of May 2024 were referred to the Presidential Alignment Committee for reconciliation,” the report indicated.
“However, the Sub-Committee observed that NNPCL in their report included the sum of N1,186,540,693,485.36 as an amount brought forward totalling N5,309,418,715,637.13 in their ledger. FAAC Postmortem did not recognize the Balance Brought Forward because it was not included in the FAAC report earlier submitted,” the report concluded.
Meanwhile, Investors king gathered that Nigerians debate the effectiveness of subsidy removal on economic reform owing to the evident result of a hike in commodity and deepened hardship.
