The drop in crude price internationally is reported to have affected the Federal Account Allocation Committee’s (FAAC) disbursements between January and March which dropped to $1.929 trillion compared to the N1.938 trillion disbursed same period in 2018.
The Nigeria Extractive Industries Transparency Initiative (NEITI) reported in its quarterly review that the total FAAC disbursements in Q1 2019 ended the recent trend of over N2 trillion disbursements, which lasted for three consecutive quarters of Q2 to Q4 2018.
A breakdown of the disbursements shows that the Federal Government received N803.18billion in the first quarter of this year. This was 1.18 percent lower than the N812.8billion which the Federal Government received in the same period of 2018 and 46.2 percent higher than the N549.1 billion disbursed in the corresponding quarters of 2017.
The NEITI review attributed the reduction in FAAC disbursements to drop in oil prices. “Oil prices experienced a downward spiral from November 2018. Oil prices were above $80 per barrel in October 2018 but by December 2018, they had dropped to $57 per barrel. Average oil price for the first quarter of 2019 was $63.17 per barrel. Average oil price for year 2018 was $71.06 per barrel. Thus, oil prices have been considerably lower in the first three months of 2019 than they were in 2018”, the report stated.
The last issue of the NEITI Quarterly Review had projected a continued increase in disbursements for 2019 based on the expectation that oil prices and oil production would continue to rise.