The monthly meeting of the Federation Accounts Allocation Committee (FAAC) could not hold on Wednesday because of a dispute between states and the Nigerian National Petroleum Company (NNPC) Ltd over outstanding remittances, TheCable understands.
States decided to boycott the meeting until the national oil company remits revenues amounting to an estimated N1.7 trillion from November 2024 when petrol subsidy was fully removed.
It is not clear if the meeting will still hold this week.
FAAC — made up of the minister of finance as chairman, all state commissioners of finance, state accountants-general, the accountant-general of the federation and the permanent secretary of the federal ministry of finance — meets every month to allocate federally collected revenues based on a sharing formula.
This is not the first time the states will be squaring off with the NNPC over unremitted revenues — usually blamed on expenditure on subsidies which the national oil company used to bear full responsibility for as the sole importer of petrol.
However, this is the first time under President Bola Tinubu who recently said in a presidential TV chat that the federal government has not been depending on the NNPC to meet its financial obligations.
A senior official of The NNPC told TheCable that the company is tied down to a number of obligations, such as crude swaps and forwards which it has been using to finance operations.
This is affecting its cash flow, he said.
FAAC face-offs were frequent between 2017 and 2022 as the NNPC either failed to make remittances to FAAC or made deductions for subsidy expenses that were usually disputed by the states.
All revenues collected on behalf of the three tiers of government are shared at the monthly FAAC meetings using a formula of 52.68 per cent to the federal government, 26.72 percent to states, and 20.60 percent to local councils.
Oil-producing states are paid an extra 13 percent before the allocations to the three tiers are made.
(The Cable)
