Why we paid N123bn interim dividend to FAAC – NNPCL

The Nigerian National Petroleum Company Limited (NNPCL) has given reasons behind the payment of an interim dividend of N123 billion to the Federation Account Allocation Committee (FAAC) for the month of June.

Our correspondent reports that FAAC had on Thursday shared N907 billion among the three tiers of government.

From the money shared, NNPCL contributed N81 billion as a monthly interim dividend and N42 billion as 40 per cent oil Production Sharing Contract (PSC) profit totaling N123 billion.

The NNPCL Chief Financial Officer, Mr Umar Ajiya, said in a statement that the move was to consolidate its post Petroleum Industry Act (PIA) 2021 status as an income generating company.

“This payment is in addition to compliance on payment of royalties and taxes,” he said.

According to Ajiya, the latest development is a departure from previous years of sleaze and wastages.

“This will set the track for future profitability and global best practices designed to build NNPCL into a world class oil company in the ranks of Saudi Aramco, China Petroleum & Chemical Corp., Exxon Mobil Corp., and others.

“The goal of Malam Mele Kyari, the Group Chief Executive Officer (GECO), NNPCL, is to set the nation’s oil company on the path of profitability and sustainable growth.

“Since the transformation of the NNPC from a loss making organisation pre-PIA to a robust profit making company post-PIA, the company under Kyari has pursued global governance best practices aimed at repositioning the company for greater growth.

“The payment to FAAC clearly shows that the company under the leadership of Kyari is moving in a positive trajectory as enshrined in the PIA.”

On Thursday, Mr Bawa Mokwa, Director, Press and Public Relations, Office of the Accountant General of the Federation (OAGF) had stated that the N907.054 billion shared by FAAC comprised distributable statutory revenue of N301.501 billion and Value Added Tax (VAT) revenue of N273.225 billion.

Mokwa stated that the revenue shared also comprised Electronic Money Transfer Levy (EMTL) revenue of N11.436 billion and Exchange Difference revenue of N320.892 billion.

He said that the total deductions in June for cost of collection was N73.235 billion and total deductions for savings, transfers and refunds was N979.078 billion noting that the balance in the Excess Crude Account (ECA) was 473,754.57 million dollars.

Also during the FAAC meeting chaired by the Accountant General of the Federation, Dr Oluwatoyin Madein, stated that from the total distributable revenue of N907.054billion; the Federal Government received N345.564 billion.

In the same vein, State Governments received N295.948 billion and the Local Government Councils got N218.064 billion.

A total N47.478 billion of the money was shared to the relevant states as 13 per cent derivation revenue.

A gross statutory revenue of N1,152.921 billion was received for the month of June 2023, which was higher than the sum of N701.787million received in the month of May by N451.134 million.

From the N301.501 billion distributable statutory revenue, the Federal Government received N146.710 billion; State Governments, N74.413 billion; and Local Government Councils received N57.370 billion.

A total of N23.008 billion was shared to relevant States as 13 per cent derivation revenue.

For the month of June 2023, the gross revenue available from the Value Added Tax (VAT) was N293.411 billion, this was higher than theN270.197 billion available in the month of May 2023 by N23.214 billion.

The Federal Government received N40.984 billion, the State Governments received N136.613 billion and the Local Government Councils received N95.629 billion from the N273.225 billion distributable Value Added Tax (VAT) revenue.

The N11.436 billion Electronic Money Transfer Levy (EMTL) was shared as follows: the Federal Government received N1.715 billion, the State Governments received N5.718 billion and the Local Government Councils received N4.003 billion.

From the N320.892 billion Exchange Difference revenue, the Federal Government received N156.155 billion while the State Governments received N79.204 billion.

The Local Government Councils received N61.063billion and the sum of N24.470 billion was shared to the relevant States as 13 per cent mineral revenue.

According to the communiqué, in the month of June 2023, Companies Income Tax (CIT) recorded a tremendous increase.

Import and Excise Duties, Value Added Tax (VAT), Oil and Gas Royalties increased significantly, while Petroleum Profit Tax (PPT) and Electronic Money Transfer Levy (EMTL) decreased considerably.