FG Records N52.3bn Shortfall In Revenue

The drop in the prices of crude oil in the international market again took its toll on the federation account as the gross revenue into the account declined by N52.36bn from N485.95bn received in June to N433.58bn in July.

The revenue figures for the period were released on Wednesday in Abuja shortly after the Federation Account Allocation Committee meeting, which was presided over by the Permanent Secretary, Federal Ministry of Finance, Mrs. Anastacia Nwaobia.

Nwaobia, who addressed journalists shortly after the meeting, which began at 4pm and lasted till 7:54pm, attributed the decline in revenue to various reasons.

For instance, she said there was a loss of about $22.53m (N4.44bn) in revenue due to a drop in average price of crude oil from $65.76 per barrel in May to $61.27 per barrel in June 2015.

Also, she said the persistent shutdown and shut-in of trunks and pipelines at various terminals, as well as emergency repairs, which led to the declaration of force majeure had continued to impact negatively on revenue performance.

She said, “The gross revenue of N433.58bn received for the month was lower than the N485.95bn received in the previous month by N52.36bn.

“Shutdown and shut-in for maintenance and emergency repairs as well as declaration of force majeure by the Shell Petroleum Development Company were major issues that negatively impacted crude oil revenue.

“Also, there was a revenue loss of $22.53m as a result of the drop in average price of crude oil from $65.76 in May to $61.27 in June.”

As a result of the poor revenue performance, the allocations to the three tiers of government witnessed a decline of N27.44bn from N620.66bn in June to N539.24bn.

When compared to the budgeted sum of N620.66bn that should have been shared based on the 2015 Appropriation Act, the N511.79bn shared in June represents a huge decline of N108.86bn.

The amount was shared under four distributable sources as follows – statutory allocation, N424.1bn; Value Added Tax, N74.95bn; exchange gain, N6.4bn and refund made by the Nigerian National Petroleum Corporation to the federation account being debt owed the Federal Government, N6.33bn.

Out of the total amount shared under statutory allocation, the Federal Government, after deducting the cost of collections to the revenue generating agencies got N202.11bn, representing 52.68 per cent; states got N102.51bn or 26.72 per cent; while the local governments received N79.03bn or 20.6 per cent.

The balance of N28.2bn was allocated to the oil producing states based on the 13 per cent derivation principle.

Punch report.

It is simply called CHANGE!!!