Adeosun said this while briefing State House correspondents at the end of a meeting of the National Economic Council presided over by Osinbajo at the Presidential Villa, Abuja.
All state governors, governor of the Central Bank of Nigeria and some relevant ministers are members of the council chaired by the Vice President.
Adeosun said the Nigerian National Petroleum Corporation was operating as a business, hence the government needed to act once its expectations from the firm were not met.
She stated, “In my capacity as the chairman of FAAC, I briefed governors on the deadlock that we have got currently in the Federation Account and explained what happened. There was quite an extensive debate on what to do.
“For the purpose of this briefing, we operate the NNPC as a business. We have invested public capital in that business; and we have expectations of return. And when that return falls lower than our expectations, then the owners of this business, which in this case are the Federal Government and states, need to act.
“So, that was what caused the deadlock yesterday (Wednesday) and we really felt the figures the NNPC was proposing for FAAC were unacceptable. We felt that some of the costs couldn’t be justified, and so we have decided that rather than approve the accounts, we will go back and do further work.”
She added, “Further negotiations and interactions are going on with the NNPC as we speak. However, we did brief both Mr President and Mr Vice President on the deadlock and asked for their support and their forbearance in this, because the consequence of this is that salaries might well be delayed in many states as a result of this.
“But we feel that in order to get to the accurate figures that we need, we have asked for forbearance and the governors and the Federal Government are all in agreement that we need to get to the bottom of those figures.”
The minister explained that with oil price at $76 per barrel in the spot market and Bonny Light at about $78, the government wanted to be saving aggressively into the Excess Crude Account, because the window of relatively high oil price might not last.
She said state governors wanted action taken and they were fully in support of the positions of the Ministry of Finance and the commissioners for finance not to approve the accounts until the government got further explanations on some of the costs being implemented.
On what the issue with the NNPC was, Adeosun explained, “Based on oil price and oil quantity, you can calculate what you are expecting to see in the Federation Account and if the figure is less, then the right question that any stakeholder must ask is why.
“So, we have been going back and forth with the NNPC to try and understand these figures before we can accept them.
“Remember that the FAAC figures have to be formally accepted by the federation account committee and we were simply not comfortable with the quantum of some of the deductions made and, therefore, we could not approve those figures.
“So, even as we speak, there is an interface going on among the Commissioners of Finance Forum, Ministry of Finance, Office of the Accountant-General, the CBN and the NNPC. We hope to be able to convene FAAC within the next few days.”
Adeosun put the balances in the ECA at $1.916bn; Stabilisation Fund, N18.892bn; and Natural Resources Fund, N133.715bn.
She explained that additional credit of $80.6m accrued into the ECA in May.
The minister said the council appointed a committee of Kaduna, Kogi, Ebonyi and Lagos state governors to review the administration and operation of the Stabilisation Fund Account.
The NNPC on Thursday justified its N147bn June remittance to the Federation Account, saying it was in line with the terms of agreement it had with state governors on the matter.
The Group General Manager, Group Public Affairs, NNPC, Ndu Ughamadu, stated that the agreement the corporation had with the governors was that it would make a monthly remittance of N112bn to and account for sharing by the Federation Accounts Allocation Committee to the three tiers of government.
This, he said, was subject to sufficient funds from the sale of domestic crude oil allocation for the corresponding month after meeting cash call obligations on joint ventures, deductions of Premium Motor Spirit cost under-recovery and pipeline maintenance costs.
Ughamadu argued that the NNPC was able to surpass the terms of agreement with the governors in June by N35bn, having taken a cue from their posture by taking from the sum meant for settling cash call obligations.
The corporation regretted the governors’ additional request of N40bn, saying it was unfortunate, given the fact that the NNPC was set to exit the cash call arrangement.
The NNPC insisted that it upheld the agreements reached with the governors with respect to its most recent remittance to the government.
Although it did not disclose the amount deducted for under-recovery on PMS and pipeline maintenance, it denied claims that it deducted N89bn that was meant for FAAC.
A finance commissioner had alleged that the corporation deducted N89bn that was meant for FAAC.
When confronted with the claims of the commissioner, Ughamadu said, “Not correct. We provided more than the average remittance we agreed with the governors for June. The agreement the NNPC has with the governors is that FAAC be given N112bn monthly.
“This, however, will be subject to sufficient funds from the sale of domestic crude oil allocation for the corresponding month after meeting cash call obligations on joint ventures, deductions of PMS cost under-recovery and pipeline maintenance.”
He added, “Incidentally, due to the posture of the governors, the NNPC was able to raise N147bn this month (June) for the governors by taking from the amount meant for settling cash call obligations.
“Sadly, however, the governors wanted additional N40bn. Unarguably, this is very unfortunate, considering that the NNPC is exiting the cash call phenomenon.”
The Commissioner for Finance, Ekiti State, Chief Toyin Ojo, told The PUNCH that as of Wednesday when the FAAC meeting was convened, the NNPC had yet to remit any amount into the Federation Account.
He said that members of the committee were told that it would take up to Friday before the remittances could be made into the Federation Account.
His counterpart in Osun State, Mr Bola Olabamiji, said he and his colleagues were still waiting in Abuja following the crisis at the FAAC meeting and would be in the Federal Capital Territory till the time the issue would be resolved.
Oyebamiji stated, “We can’t determine the shortfall but we have a benchmark of above N600bn every month. The NNPC did not give any reason for the shortfall.
“The way forward is that the NNPC should come out with a reasonable figure. We have been doing the FAAC meeting for many years and there were no major issues like this one. It is important for them to come out with a reasonable figure and we will sit down and move the nation forward.”
The Bayelsa State Government said the inconclusive nature of the FAAC meeting would result in a slight delay in the payment of salaries for civil servants for June.
The Commissioner for Finance, Mr Maxwell Embeleyi, said in a statement on Thursday that the meeting could not hold because of the inability of the NNPC to present accurate figures of revenue collected for the month to the committee.
The commissioner explained that the Bayelsa State Government was obliged to alert the workers and the good people of the state that the delay in the FAAC meeting could result in a slight delay in the payment of salaries.