THE allocations to the three tiers of government has declined by N17.38 billion from N387.77billion shared in December to N370.38billion in January.
Minister of Finance, Mrs Kemi Adeosun disclosed this development while addressing journalists shortly after this month’s Federation Accounts Allocation Committee meeting which was held at the headquarters of the ministry in Abuja.
She attributed the decline in allocation to drop in oil prices from $43.4 to $39.04 which resulted into a loss of revenue of $22.55million.
The minister added that the Cash Call obligation of the Nigerian National Petroleum Corporation to its Joint Venture partners led to a reduction in the amount available for sharing by the three arms of government.
Adeosun said as part of measures aimed at reducing the negative impact of cash call obligation on the federation account, the Nigerian National Petroleum Corporation is proposing a Modified Carry Arrangement.
According to her, this would be more beneficial to the country owing to the continuous decline in oil prices.
The Minister of Finance said, details of the agreement is being worked out and would be presented to the National Economic Council for approval.
Giving a beak down of the allocation to the three tiers of government, the minister said in the area of statutory allocation, the Federal Government after deducting the cost of collection to revenue generating agencies received N137.47billion representing 52.68 percent.
The states according to her got N69.72billion or 26.72 percent, local governments N53.75billiion or 20.8 percent while the sum of N22.38billion was allocated to the oil producing states based on the 13 percent derivation principle.
For Value Added Tax revenue, the minister said the Federal Government received N10.04billion or 15 percent, states N33.46billion or 50 percent while local governments received N23.42billion or 35 percent.
Adeosun said, “The gross statutory revenue of N290.96 billion received for the month (January) was lower than the N315.01billion received in the previous month by N24.05billion.
“Shut-in and shut-down of production for the repairs and maintenance continued during the period under review, however, there was a slight increase in production of crude in December 2015.
“The drop in the average price of crude oil from $43.4 in November to $39.04 in December 2015 resulted in a revenue loss of $22.55million.
“The total revenue distributable for the current month including VAT is N370.38billion.”
The balance in the Excess Crude Account, the minister said is $2.25billion as at February 23.