Nigeria loses $8m to drop in crude oil prices in one month

Nigeria lost some $8.65 million to drop in average price of crude from $61.27 per barrel in June to $56.76 in July, according to the finance ministry.

Soft oil prices have dealt a blow to government resources and there are now desperate move to look for ways of revving up income. Analysts see revenue losses worsening at least for August and September, especially as oil prices hovered around $43 as of Tuesday.

Government official records further show that between January and July 2015, revenue inflows were re-ordered at N1.857 trillions, about N156.9 billion lower than what was budgeted.

Anastesia Nwaobia, permanent secretary, ministry of finance, announced after the Federal Accounts Allocation Committee (FAAC) meeting in Abuja that gross revenue, in August, dropped again to N369.140 billion, some N64.444 billion lower than the N433.584 billion recorded the previous month and N144.553 billion below budget estimates.

Nwaobia said the drastic drop in crude oil export, shutdown and shut-in of production for maintenance at different times and terminals in July, negatively impacted crude oil revenue.

Apart from oil, revenue from Value Added Tax (VAT) dropped also by N12.258 billion to N59.689 billion in August from N71.947 billion in July. The figure also dropped N43.007 billion lower than N102.696 budgeted estimates.

This is even as she disclosed that some Federal Government Ministries Departments and Agencies (MDAs) resisted directive for them to migrate to Treasury Single Account (TSA), which is to help government better manage its lean resources.

Nwaobia said the transition became necessary in view of the fact that the government did not know how many accounts the MDAs had. According to her, “some MDAs are just realising that they have some accounts that are dormant.”

She urged apprehensive MDAs to approach the AGF to “guide them on how to key into TSA.”

She also announced that the Excess Crude Account (ECA) had accrued to $2.257 billion and that the government had decided not to touch the Account for now but prefer to keep it as a buffer.

At the end of the FAAC meeting, N412.608 billion was shared among the three tiers of government as against the N490.2 billion that was shared the previous month.

For statutory allocation, N347.959 billion was shared among the three tiers with the Federal Government receiving N168.623 billion or 52.68 percent of the what was shared; states governments got N85.528 billion or 26.72 percent; Local governments received N65.938 billion or 20.6 percent, while the balance of N27.870 billion was shared as 13 percent derivation to oil and gas producing states.

A total of N59.689 billion was shared by the three governments from VAT proceeds. From the amount, the Federal Government got N8.953 billion; states received N29.845 billion, while local governments pocketed N20.891 billion.

Nwaobia revealed that N4.960 billion was also shared as exchange gains proceeds while N12.5 billion was refunded to the Federal Inland Revenue Service (FIRS) from what they over taxed their paying individuals and corporate entities.