Excess crude account unchanged despite NNPCL’s N907bn FAAC remittance

<p>The balance in the Excess Crude Account has remained stagnant at about $474m in the last two years despite remittance of N907bn to the Federal Account Allocation Committee by the Nigerian National Petroleum Company Limited.</p>, <p>The NNPCL had resumed remittances to FAAC in June after failing to do so due to huge fuel subsidies expenses.</p>, <p>According to a communiqué issued at the end of the FAAC meeting for July 2023, seen by The PUNCH, NNPCL said the balance in the excess crude account was $473,754 as of June 2023, the same amount in the purse as of December 15, 2022, while it paid N907.054bn into the FAAC purse.</p>, <p>The meeting was chaired by the Accountant General of the Federation, Dr. Oluwatoyin Madein.</p>, <p>From the total distributable revenue of N907bn; the Federal Government received N345bn, the State Governments received about N296bn and the Local Government Councils received N218bn. A total sum of N47bn was shared to the relevant states as 13 per cent derivation revenue.</p>, <p>Energy expert, Bala Zaka, described the trend as “very dangerous and negative.”</p>, <p>The ECA is an account created to save the extra funds made anytime the country sold crude oil higher than the approved benchmark in the budget.</p>, <p>For example, if the crude oil benchmark was $70 per barrel and the commodity sold for $75 per barrel, the excess $5 was saved for rainy days.</p>, <p>While Nigeria had benchmarked crude oil price for 2023 at $75 per barrel, international Brent had risen to $82 per barrel last week before dropping to $80 per barrel as at Friday. It is worthy of note that Nigeria’s crude grade, Bonny Light usually preferred by international refinners, sells +$1 above dated Brent.</p>, <p>The account had declined by 89 per cent in the last eight years, moving from $4.1b in November 2014 to $472,513 in the same period of 2022.</p>, <p>Professor of Economics at the Olabisi Onabanjo University, Ogun state, Sheriffdeen Tella, said the unfortunate situation occurred due to government’s discipline.</p>