The News DietThe News Diet
    What's Hot

    ANLCA Spokesman ‘Onyeme’ Vies For President Of Ex-Commandos Association

    September 29, 2023

    NIMASA Emerges Best Federal Agency On Digital Transformation

    September 28, 2023

    Endangered Species: Seme Customs Intercepts 62 African Parrots, 1 Hawk

    September 25, 2023

    Subscribe to Updates

    Get the latest efficient and accurately analysed news from The News Diet.

    Facebook Twitter Instagram
    Friday, September 29
    Facebook Twitter Instagram
    The News DietThe News Diet
    • Home
    • News
    • Editorial
      • The Verdict
      • Interviews
      • Special Report
    • Maritime

      NIMASA Emerges Best Federal Agency On Digital Transformation

      September 28, 2023

      FG Shops For Bashir Jamoh’s Replacement As NIMASA DG

      September 25, 2023

      Women In Maritime Seek Legislation, Incentives To Curb Plastics Pollution

      September 21, 2023

      WIMA-Nigeria Tasks Blue Economy Ministry To Address Multiple Charges, EoDB

      September 21, 2023

      N180bn Customs Boats Rotting Away At Lagos Marina – MARAN laments

      September 18, 2023
    • Business
    • Politics

      LP, Obi Couldn’t Prove Tinubu’s Conviction In US – Tribunal

      September 6, 2023

      NNPP Suspends Kwankwaso Over Anti-Party Activities, Aniebonam Resigns

      August 29, 2023

      APC Vice Chairman Lukman Resigns Over Illegalities, Interference

      July 26, 2023

      Tinubu Suspends Buhari’s 11th Hour Tax Changes

      July 7, 2023

      FG Declares Monday ‘June 12’ Public Holiday

      June 8, 2023
    • Sports

      AIU Clears Amusan To Participate At World Championships

      August 18, 2023

      Chelsea Agree £23.2m Deal For French/Nigerian Teenage Midfielder ‘Ugochukwu’

      July 30, 2023

      Security Agencies To Commence Sports, CSR Projects At Zongo Community

      June 17, 2023

      Osimhen Leads Napoli To First Serie A Title In 33 Years

      May 5, 2023

      Iwobi Rescues Point For Toffees, Ends 7-month Goal Drought

      May 2, 2023
    • Photo Diet

      2023: ANLCA, APFFLON Presidents Ponder Headway For Freight Forwarding Sector

      January 13, 2023

      Sambo, Lai Mohammed Discuss National Issues At Transport Ministry Headquarters

      November 1, 2022

      Sambo Felicitates With NIMASA DG ‘Jamoh’ On OFR Honours

      October 12, 2022

      St Augustine’s Anglican Church Youths Visit Lagos Ports Complex

      September 15, 2022

      NCAC Presents Partnership-That-Works Award To Governor Sanwo-Olu

      July 14, 2022
    • Lifestyle

      Mohbad’s Death: Valuable Lessons For Young Nigerians

      September 23, 2023

      Marital Bliss: NIWA Celebrates As Engr. Ororo’s Daughter ‘Tare’ Weds ‘Anderson’

      July 4, 2023

      Ezeobi Wins Peak Performing Woman of the Year Award

      July 4, 2023

      OMIS Awards Labeled Africa’s Maritime Oscars

      September 26, 2022

      NATOP, NCAC Deepen Collobaration To Develop Tourism Sector

      September 23, 2022
    • Contact
    The News DietThe News Diet
    Home » Fuel Subsidy: States To Stop Salary Payments As FAAC Drops – Governors
    Business

    Fuel Subsidy: States To Stop Salary Payments As FAAC Drops – Governors

    Kenneth JukporBy Kenneth JukporJuly 7, 2022Updated:July 7, 2022No Comments64 Views
    Facebook Twitter Pinterest LinkedIn WhatsApp Reddit Tumblr Email
    Fuel Subsidy: States'll Stop Salary Payments As FAAC Drops - Governors
    Nigerian Governors Forum
    Share
    Facebook Twitter LinkedIn Pinterest Email

    The Nigeria Governors’ Forum has lamented that the subsidy on petroleum products, especially Premium Motor Spirit (petrol), has placed a huge financial burden with 11 percent reduction in their Federal Account Allocation which means will be unable to pay salaries.

    The NGF, which is the umbrella body for the 36 governors of the federation across party lines, made this known in a memo forwarded to the House of Representatives.

    According to the Governors, the memo is in response to the call for memoranda by the House’ Ad Hoc Committee on the Volume of Fuel Consumed Daily in Nigeria, which is investigating the actual amount of PMS the country consumes daily.

    The memo, which was signed by the Head, Legislative Liaison, Peace and Security, NGF, Fatima Usman Katsina, for Chairman of the Forum, was titled ‘Findings on the Volume of Fuel Consumed Daily in Nigeria,’ dated July 1, 2022, and addressed to committee’s Chairman, Abdulkadir Abdullahi.

    The governors referred the House to a November 2021 report by its National Executive Council’s ad hoc committee interfacing with the Nigeria National Petroleum Corporation on the appropriate pricing of PMS in Nigeria, which was chaired by Governor of Kaduna State, Nasir el-Rufai, and had governors of Edo, Jigawa, Ebonyi, Akwa Ibom and Ekiti, as well as the Governor of the Central Bank of Nigeria; Minister of Finance, Budget and National Planning; Accountant-General of the Federation, Group Managing Director of the NNPC and the Permanent Secretary, MBNP.

    With fiscal pressures growing unsustainably as the PMS subsidy significantly reduces the flow of revenues into the Federation Account, thirty-five out of 36 states are likely to see transfers from the federation fall (in nominal terms) between 2021 and 2022, with the average decline projected to be about 11 percent.

    “Most states are already experiencing fiscal stress, with 30 out of 36 states recording fiscal deficits in 2020, including Lagos and every oil-producing state except Akwa Ibom. With the projected decline in gross distributable federation revenues in 2022, fiscal deficits and debt burdens will grow even larger and faster. This will mean that transfers from the federation will not be enough to cover even salaries, and certainly not recurrent costs, which are growing in nominal terms,” the report said.

    The Governors also observed that with the coming into effect of the Petroleum Industry Act, gross oil & gas revenues could be much lower than currently projected because of the new fiscal terms and the earmarking of deductible revenues specified in the PIA, and that could reduce net oil & gas revenues even further.

    NGF stressed the need for greater accountability and transparency around oil and gas revenues as the only immediate options for easing the pressure on government finances and maximising socially responsible profit gain.

    The memo partly read, “Although the operating environment has significantly worsened since the report was released, with NNPC now consistently reporting zero remittance to the Federation Accountant as profit from joint venture, production sharing contract and miscellaneous operations, the position of the forum remains generally the same.”

    The NGF recalled how the report noted that the “federation (FAAC) net oil & gas revenues have been declining since 2019 and are projected to decline significantly in 2022 by between N3bn and up to N4.4bn unless action is taken now.” The memo read, “The following are some of the major findings relating to the volume of fuel consumed in the country:

    “Remittances to the Federation Account Allocation Committee have continued to shrink as NNPC recovers shortfall quite arbitrarily from the Federation’s crude oil sales revenue. FAAC deductions for PMS subsidy are above 2019 levels, even without adjusting for reduced purchasing power of the naira due to inflation and FX rate deterioration.

    “An analysis of the average monthly PMS consumption by states showed that a third of the country accounts for over 65 per cent consumption of PMS. The analysis showed that the following States of Lagos, Oyo, Ogun, Abuja, Delta, Kano, Kwara, Edo, Rivers, Kaduna, Kebbi and Adamawa accounted for 65 per cent of PMS consumption in the country. Most states with high PMS consumption either have borders with neighbouring countries or are in close proximity, this has been an avenue for smugglers to benefit from profitable arbitrage opportunities in PMS pricing.

    “Households directly consume only about 25 per cent of the PMS that is consumed nationally, with the remaining three-quarters being consumed by firms, MDAs, transport operators or smuggled to neighbouring countries where the PMS price is nearly three times what it is in Nigeria; and of the PMS consumed by households, the richest 40 per cent of households account for over three-quarters of the PMS purchased by households, while the poorest 40 per cent of households purchased less than 3 per cent of all PMS sold in Nigeria.

    “In the current fiscal regime, remittances to FAAC would continue to shrink as NNPC recovers this shortfall from the Federation as a result of crude oil price recovery. The report recommended a PMS pricing structure that addresses regional arbitrage and smuggling of PMS and provides additional revenue to the Federation Account. There is a significant market opportunity for additional export revenue streams for Nigeria to be had given the price parity with our neighbouring countries.

    “Privatisation of the three government refineries as is, or after their full rehabilitation if affordable and viable, and expediting the licensing procedure for modular refineries will reduce the recurring government expenditure on refinery maintenance and increase the country’s refining capacity.”

    The governors also noted that there were also economic risks highlighted in the report. “Fiscal pressures are threatening Nigeria’s recovery, as rising prices continue to push millions into poverty,” they stated.

    The memo further read, “Rising prices are pushing millions of Nigerians into poverty. Rising inflation between 2020 and 2021 is expected to have pushed an additional 5-6 million Nigerians into poverty. Food insecurity is increasing in both poor and non-poor households, with some adults skipping meals. Because inflation is high, even if it remains stable, it will continue to push many more Nigerians into poverty.”

    Fuel Subsidy Nigerian Governors Nigerian Poverty Senate
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email

    Related Posts

    ANLCA Spokesman ‘Onyeme’ Vies For President Of Ex-Commandos Association

    September 29, 2023

    NIMASA Emerges Best Federal Agency On Digital Transformation

    September 28, 2023

    Endangered Species: Seme Customs Intercepts 62 African Parrots, 1 Hawk

    September 25, 2023

    Leave A Reply Cancel Reply

    Latest Post
    News

    ANLCA Spokesman ‘Onyeme’ Vies For President Of Ex-Commandos Association

    September 29, 2023

    The National Publicity Secretary of the Association of Nigeria Licensed Customs Agents (ANLCA), Mr. Emmanuel…

    NIMASA Emerges Best Federal Agency On Digital Transformation

    September 28, 2023

    Endangered Species: Seme Customs Intercepts 62 African Parrots, 1 Hawk

    September 25, 2023

    Emmanuel Onwuka Nominated For Future Awards Africa OAP Category

    September 25, 2023

    FG Shops For Bashir Jamoh’s Replacement As NIMASA DG

    September 25, 2023

    Mohbad’s Death: Valuable Lessons For Young Nigerians

    September 23, 2023

    Editorial Picks

    NIMASA Emerges Best Federal Agency On Digital Transformation

    September 28, 2023

    FG Shops For Bashir Jamoh’s Replacement As NIMASA DG

    September 25, 2023

    Mohbad’s Death: Valuable Lessons For Young Nigerians

    September 23, 2023

    Women In Maritime Seek Legislation, Incentives To Curb Plastics Pollution

    September 21, 2023

    Subscribe to News

    Get the latest efficient and accurately analysed news from The News Diet.

    Advertisement
    Demo
    Stay In Touch
    • Facebook
    • Twitter
    • Instagram
    • YouTube
    Latest Post
    News

    ANLCA Spokesman ‘Onyeme’ Vies For President Of Ex-Commandos Association

    September 29, 2023

    The National Publicity Secretary of the Association of Nigeria Licensed Customs Agents (ANLCA), Mr. Emmanuel…

    NIMASA Emerges Best Federal Agency On Digital Transformation

    September 28, 2023

    Endangered Species: Seme Customs Intercepts 62 African Parrots, 1 Hawk

    September 25, 2023

    Emmanuel Onwuka Nominated For Future Awards Africa OAP Category

    September 25, 2023

    FG Shops For Bashir Jamoh’s Replacement As NIMASA DG

    September 25, 2023

    Mohbad’s Death: Valuable Lessons For Young Nigerians

    September 23, 2023

    About Us:

    The News Diet is a credible newsblog managed by JUKKEN Consults Limited, a media organization and public relations consulting outfit.

    JUKKEN Consults is also focused on Brand Management, Media Buying, Print Production, etc. The outfit has an impressive track-record of executing media campaigns and projects for high profile clients across various sectors of Nigeria’s economy.

    We also operate a waste recycling/ eco-promotional company, Golden Debris.

    Facebook Twitter Instagram Pinterest YouTube
    Top Insights

    ANLCA Spokesman ‘Onyeme’ Vies For President Of Ex-Commandos Association

    September 29, 2023

    NIMASA Emerges Best Federal Agency On Digital Transformation

    September 28, 2023

    Endangered Species: Seme Customs Intercepts 62 African Parrots, 1 Hawk

    September 25, 2023

    Emmanuel Onwuka Nominated For Future Awards Africa OAP Category

    September 25, 2023
    Get Informed

    Subscribe to Updates

    Get the latest efficient and accurately analysed news from The News Diet.

    © 2023 All right reserved. The News Diet.
    • Home

    Type above and press Enter to search. Press Esc to cancel.