The FAAC meeting was stalled as states boycotted over NNPC’s failure to remit N1.7 trillion. With uncertainty looming, is Tinubu’s administration facing a financial crisis? Read full details
The Federation Accounts Allocation Committee (FAAC) meeting scheduled for Wednesday was stalled as state governments took a firm stance against the Nigerian National Petroleum Company (NNPC) Limited over unpaid remittances amounting to N1.7 trillion, All Facts Newspaper has learned.
State representatives boycotted the meeting, insisting that the national oil company must first remit the outstanding funds before any revenue-sharing discussions could proceed. The withheld funds reportedly date back to November 2024, following the full removal of the petrol subsidy.
It remains unclear whether the meeting will be rescheduled or if the deadlock will persist throughout the week. FAAC, which comprises the Minister of Finance (as chairman), all state commissioners of finance, state accountants-general, the Accountant-General of the Federation, and the Permanent Secretary of the Federal Ministry of Finance, meets monthly to distribute federally collected revenue based on an agreed formula.
This latest standoff marks a significant confrontation between the states and NNPC, continuing a pattern of disputes over unremitted funds, often linked to the national oil company’s subsidy deductions. However, this is the first major showdown under President Bola Tinubu’s administration.
Tinubu’s Position Contradicted?
President Tinubu had previously stated in a televised interview that his government was not relying on NNPC for financial obligations. However, the ongoing crisis suggests otherwise, as states are now demanding transparency in remittances.
NNPC’s Justification: Crude Swaps and Financial Constraints
A senior NNPC official told All Facts Newspaper that the company’s finances are currently stretched due to commitments such as crude swaps and forward contracts, which are being used to sustain operations. According to the official, these financial obligations have significantly impacted the company’s cash flow, making it difficult to remit the expected funds to FAAC.
Recurring FAAC Face-Offs Over NNPC Remittances
This is not the first time FAAC has clashed with NNPC over withheld revenues. Between 2017 and 2022, similar disputes were frequent, primarily due to the company’s failure to remit funds or deductions made for subsidy expenses, which states often contested.
Revenue collected by the federal government is shared at FAAC meetings using a formula where 52.68% goes to the federal government, 26.72% to states, and 20.60% to local governments. Oil-producing states receive an additional 13% before the general distribution.
With this latest impasse, questions are now being raised about NNPC’s financial transparency and the federal government’s true stance on its revenue dependencies. Will the states force the NNPC’s hand, or will the federal government intervene to break the deadlock? Nigerians are watching closely.
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