Fresh Row over Revenue Sharing, as States Indict NNPC

By Akanimo Sampson, Abuja/

 

The Nigerian National Petroleum Corporation (NNPC) is at the centre of a fresh revenue sharing crisis as the 36 states in Nigeria are up against an alleged unfair financial dealing of the national oil company, NewsmakersNG reports today.

 

In addition to its exploration activities, NNPC which was established on April 1, 1977, was also given powers and operational interests in refining, petrochemicals and products transportation as well as marketing.

 

Among the corporation’s core values is, ‘’integrity, transparency and accountability’’.

 

But, the obviously bitter state governments claimed at the weekend in Abuja, Nigeria’s capital city, that the national oil company is economical with its core values. They want NNPC to demonstrate transparency in its operations and in the remittance of oil revenues into the Federation Account.

 

Chairman of the Forum of Finance Commissioners, Mr Mahmood Yunusa, said the oil corporation could not just remit whatever amount that pleases it into the federation account since the modality for calculating monthly oil revenue was clear.

 

According to him, the collection of oil royalty and Petroleum Profit Tax (PPT), will be returned to the Department of Petroleum Resources (DPR), and the Federal Inland Revenue Service (FIRS).

 

This fresh row is, however, coming some four months after an ad hoc committee of the House of Representatives last March described the current revenue allocation formula in the country as illegal on account that it did not receive the approval of the National Assembly.

 

The committee, which was headed by a member of the All Progressives Congress (APC) from Benue State, Mr Mark Terseer-Gbillah, was investigating data collection processes, maintenance and usage by the Revenue Mobilisation Allocation and Fiscal Commission.

 

Under the current sharing formula, the Federal Government takes the lion’s share of 52.68 per cent from the Federation Account. The 36 states take 26.72 per cent, while the balance of 20.60 per cent is given to the 774 local governments in the country.

 

Revenue sharing formula has always generated controversies in Nigeria and remains a key factor in the undying agitation for true federalism.

 

According to the chairman of the finance commissioners forum, ‘’part of the process of strengthening the system will be to take the collection and remittance of royalty from NNPC to the DPR, while the collection and remittance of PPT will also be returned to the FIRS in line with the law.

 

‘’This is part of the process that we are trying to strengthen and we are trying to adopt. It is part of the law under oil and gas, that all royalties should be collected and remitted to the Federation Account by the DPR, it is DPR’s responsibility.

 

‘’Before DPR collects that royalty, it has to make sure that the actual amount that is supposed to be remitted is remitted. If it is under-remitted, the DPR will be held responsible for the shortfall and I know DPR would not want to be responsible for such a shortage’’.

 

The finance commissioners argued: ‘’If you are supposed to remit X billion of naira, and you remit B billion of naira to them, they won’t accept because it is under-remitted. The royalty is calculated and paid based on the oil lifted.

 

‘’The same thing with PPT, the NNPC has to remit the same amount that has to be remitted to FIRS, if not the FIRS will not accept because they would not want to be responsible for the shortfall or under remittance that ordinarily they shouldn’t be responsible for. So that will balance the revenue collecting system. There should be a kind of check and balance.’’

 

In a seeming frantic bid to resolve the conflict, Yunusa says a joint session of the Governors’ Forum, Federal Ministry of Finance, top management of the NNPC and Forum of Finance Commissioners is underway.

 

The Senate has been pushing for a review of the country’s revenue-sharing formula to give states and local government areas greater share than they get in the current formula, which gives more to the federal government.

 

The formula being used by the Revenue Mobilisation Allocation and Fiscal Commission (RMFAC), was first enacted in 1982 before it was brought into operation at the inception of the Fourth Republic in 1999, with the amendment.

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