Nigeria’s ECA drops to $376,655.09 from $35.7 million, as oil, gas revenue declines

Oredola Adeola

Amidst steady decline in oil and gas revenue income  due to persistent attacks on infrastructures, particularly pipelines,  oil theft and other related petroleum industry issues, the Nigeria Excess Crude Account (ECA) has plummeted from $35.7 million, it was as of June 2022 to $376,655.09 in July 25, 2022. This figure translates to less than one million dollars.

This was contained in a communiqué issued at the end of the Federation Account Allocation Committee (FAAC) meeting for July 2022, held on Tuesday in Abuja.

The total amount of money accruable to Nigeria from the sale of crude oil crashed by about N500.6bn between January and May this year, findings from various oil and gas, as well as statistical reports have indicated

Data obtained from reports by the Organisation of Petroleum Exporting Countries showed that the country produced 1.399 million barrels of crude oil daily in January, showing a decline of about 400,000 barrels of revenue loss.

EnergyDay’s check showed that Nigeria’s oil revenue stagnated below N4 trillion for first quarter 2022, as the country lost a total of 43.369 million barrels in Q1, as daily production nose-dived to 1.024 mbp in May.

This according  to industry data was due to increased incidences of pipeline vandalism, oil theft, and other technical issues. This also happened when the country is doing below its average OPEC quota.

Apart from other factors necessitating the decline in the ECA, EnergyDay gathered that the dip is also due to allocations to the federal, state and local governments which increased by N121.624 billion as FAAC shared a total sum of N802.407 billion for June.

The communiqué revealed that the N802.407 billion total distributable revenue comprised distributable statutory revenue of N608.580 billion and distributable Value Added Tax (VAT) revenue of N193.827 billion.

While the oil and gas royalties declined significantly in the period under review,  the FAAC allocation for June increased as a result of increases in  Petroleum Profit Tax (PPT) and Companies Income Tax (CIT).

The communique further established that total deductions for cost of collection was N44.606 billion and deductions for transfers, savings, refunds and 13 per cent derivation to Anambra State was a total sum of N373.200.

The share of the federal government from the total distributable revenue of N802.407 billion was N321.859 billion, the states received N245.418 billion, and the local governments got N182.330 billion.

The sum of N52.799 billion was shared to the relevant states as 13 per cent derivation revenue.

It also suggested that gross statutory revenue of N1,012.065 billion was received for the month of June 2022. This was higher than the sum of N589.952 billion received in the previous month by N422.113 billion.

From the N608.580 billion distributable statutory revenue, the federal government received N292.785 billion, the states received N148.505 billion and the local governments received N114.491 billion.

The sum of N52.799 billion was shared to the relevant states as 13 per cent derivation revenue.

In the month of June 2022, the gross revenue available from VAT was N208.148 billion, which was lower than the N213.179 billion available in the month of May 2022 by N5.031 billion.

From the N193.827 billion distributable VAT revenue, the federal government received N29.074 billion, states received N96.914 billion and the local government councils received N67.839 billion.

The communiqué also noted that in June 2022,  import duty, oil and gas royalties increased marginally, while CIT and PPT recorded significant increases as well. EnergyDay also gathered that excise duties decreased significantly while VAT decreased marginally.

Nigeria has over the years been losing billions of Naira monthly to the persistent hit on its oil installations across the country especially in the Niger Delta leading to force majeure on major terminals, poor investment inflow by investors and a decline in infrastructural efficiencies.