A Review of the Nigerian Energy Industry

NNPC spends N6.85bn on petrol subsidy in one month

*NNPC-Towers, Central Business District, Garki, Abuja.

Ike Amos

11 February 2018, Sweetcrude, Abuja — The Nigerian National Petroleum Corporation (NNPC) spent N6.849 billion on the payment of subsidy in the month of October 2017.

Data obtained from the NNPC Monthly Financial and Operations Report revealed that the amount spent of subsidy in October represented a percent of 8.95 per cent compared to N7.52 billion spent on the same item in September. The NNPC framed the subsidy payment as under-recovery.

The report also noted that the amount the NNPC spent on subsidy payment in October was the second lowest paid made since the return of subsidy in January 2017, following N6.3 billion paid in February 2017.

In addition, the report disclosed that the NNPC recorded a loss of N11.374 billion due to pipeline vandalisation, crude oil and petroleum products losses, rising from 103.9 per cent from N5.576 billion recorded in the month of September.

In particular, the report stated that the NNPC lost N445.946 million to crude oil theft; N104.07 million lost to petroleum products theft and N10.82 billion was expended on pipeline repairs and management cost.

“During the month, products pipeline breaks stood at 126 points for the month of October 2017 out of which 116 pipelines were vandalized. Port Harcourt-Aba and Aba-Enugu pipeline segment accounted for almost 80 per cent of the vandalized points,” the report explained.

To this end, the report stated that domestic crude oil and gas receipt by the NNPC in October 2017 amounted to N94.52 billion, consisting of N88.35 billion from domestic crude oil and the sum of N6.16 billion from domestic gas.

According to the report, out of the Naira receipt, the sum of N29.99 billion was transferred to Joint Venture Cash Call (JVCC) being a first line charge and to guarantee continuous flow of revenue stream to the Federation Account.

It added that, “On the receipt from net domestic crude oil and gas, NNPC transferred the sum of N29.99 billion into Federation Account and N64.53 billion to JV cash Call for the month under review.

“From October 2016 to October 2017, Federation, JV, and FG for debt repayment received the sum N829.79 billion, N731.44 billion and N37.98 billion respectively.”

Consequently, the NNPC recorded operating revenue of N354.08 billion in October, rising by 15.11 per cent from N307.59 billion recorded in September, while its operating expenditure stood at N354.49 billion, compared to N310.4 billion in the previous month.

As in other months, the NNPC recorded trading deficit of N0.41 billion, compared to a deficit of N2.81 billion recorded in September 2017.

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