How Governors caused deadlock of FAAC meeting – NNPC

The Nigerian National Petroleum Corporation, NNPC, has claimed that governors of the 36 states of the federation were making requests on it to transfer an extra N40 billion for them to share in the FAAC despite its remittance of N147 billion to the FAAC in June for sharing by the three tiers of government.

It stressed that the extra request by the governors was against the terms of the agreement it had with them on the matter.

The Minister of Finance, Mrs. Kemi Adeosun, had stated that the need for clarifications on the revenue and spendings of the Nigeria National Petroleum Corporation, NNPC, was responsible for the monthly meeting of the Federation Account Allocation Committee, FAAC, ending in a deadlock.
She pointed out that FAAC, which she chairs, could not approve the N140bn declared by NNPC because it fell far lower than the expected returns.

But in a statement issued in Abuja by the Group General Manager, Group Public Affairs of NNPC, Mr. Ndu Ughamadu, the corporation said it reached an agreement with the governors that it would make a monthly remittance of N112 billion to FAAC, subject to sufficient funds from sales of domestic crude oil allocation for the corresponding month after meeting cash call obligations on joint venture operations, as well as deductions of petrol-cost under recovery and pipeline maintenance.

Ughamadu, however, noted that for the June remittance, the NNPC was able to surpass the terms of agreement with the governors, and paid the monthly funds over by N35 billion.

He explained that the corporation’s decision to make the excess payment above the agreed sum was based on the postures of the governors, adding that the extra N35 billion was sourced from the sum meant for settling its joint venture cash call obligations.

The NNPC spokesman stated that the corporation regretted the governors’ additional request of N40 billion, saying it was unfortunate, given the fact that NNPC was set to exit the cash call phenomenon.