Idris Ahmed
15 November 2009
Abuja — The Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) and the Federation Accounts Allocation Committee (FAAC) have asked the Nigerian National Petroleum Corporation (NNPC) to explain why the country pays $545 million monthly on the Joint Venture Cash Call (JVC) only to get lesser returns.
RMAFC and FAAC said at the weekend that while the amount was benchmarked to ensure monthly production of crude oil, present realities have shown that in return government only gets about $290 million.
"And this JVC money is steady and is deducted every month. How can you have a situation where you are paying more than you are getting?" a Federal Commissioner in RMAFC said.
Yakubu Shehu said sometimes government dip into the excess domestic crude account to augment the JVC fund. "One month it was N12 billion and another month it was N50 billion", he said.
He said for three months from August to October, government did not get anything in return, even though the $545 million was still invested in the JVC.
"If I am spending more than I am earning, then let us stop the business. The RMAFC has been the vanguard of this. Let the NNPC tell us what is happening. It is a very controversial matter", he said.
Shehu said that there is a lot of misunderstanding on what the Joint Venture Cash Call was suppose to cover. He said RMAFC came up with a tabulation of all the money paid from January to October.
He said: "While we looked at the amount that came into the federation account from the crude oil exported and from the domestic excess crude, the elementary understanding of that is that this money is required to fund the operation of all the joint venture partners to bring out the crude oil for selling".
He said Nigeria earned about $1 billion in January and "this is going on down to a situation that we now have $290 million in August."
"Why dig out the oil if we are paying more than we are getting? What was agreed in the meeting was that the NNPC should organise a kind of forum where the stakeholders are told what they do with this JVC thing", he said.
Minister of State for Finance Remi Babalola said members of FAAC are worried about the Joint Venture Cash Call .
"Members were worried about money that is being taken on a monthly basis, especially when the revenue is down. It was agreed that there is no relationship between the current revenue and production and the JVC, and that whatever the amount of money that was being budgeted at the beginning of the year should be spread out on monthly basis", he said.
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