A Review of the Nigerian Energy Industry

NNPC spends N139bn on fuel subsidy in three months

*NNPC-Towers.

Ike Amos

12 August 2018, Sweetcrude, Lagos — The Nigerian National Petroleum Corporation (NNPC) has spent N139.3 billion on subsidy for petrol, also known as Premium Motor Spirit, PMS, between January and March 2018, according to data obtained from the corporation’s Monthly Financial and Operations Report.

The report noted that the amount deducted for subsidy, listed as under-recovery within the three-month period represented 74.19 percent of the NNPC’s total transfers to the Federation Account of N187.815 billion within the period under review.

Specifically, the report explained that in January 2018, the NNPC incurred N45.783 billion as the subsidy for fuel, while for February and March 2018, the NNPC incurred N59.52 billion and N34.03 billion respectively.

In addition to fuel subsidy cost, the report noted that within the three months, the NNPC recorded N1.243 billion, N2.394 billion, N26.844 billion and N138.426 billion for crude oil losses, petroleum product losses, pipeline repairs & management cost, and Joint Venture Cost Recovery respectively.

The report said, “Domestic crude oil and gas receipt in March 2018 amounted to N161.93 billion, consisting of N150.49 billion from domestic crude oil and the sum of N11.44 billion from domestic gas. Out of the Naira receipt, the sum of N88.90 billion was transferred to Joint Venture Cash Call (JVCC) being a first line charge and to guarantee continuous flow of revenue stream to Federation Account.

“NNPC transferred the sum of N73.01 billion into Federation Account for the month under review. From March 2017 to March 2018, Federation, JV, and FG for debt repayment received the sum N851.65 billion, N672.02 billion and N6.33 billion respectively.”

The report also declared that the NNPC made remittances to the Federation Account from its export of crude oil and gas, stating that between January and March 2018, the corporation remitted $363.154 million to the Federation Account, after deducting $1.057 billion for Joint Venture Cost Recovery from its total crude oil and gas sales proceeds of $1.421 billion in the period under review.

In addition, the report stated that the NNPC recorded total export sale of $329.41 million was recorded in March 2018, noting that this was 48.25 percent lower than the previous month’s figure.

It noted that crude oil export sales contributed $175.60 million, representing 53.31 percent of the dollar transactions compared with $535.51 million contributions in the previous month.

It said, “Also the export gas sales amounted to $153.81 million in the month. The March 2017 to March 2018 crude oil and gas transactions indicated that crude oil & gas worth $4.79 billion was exported.

“Total export receipt of $412.34 million was recorded in March 2018 as receipt against $574.16 million in February 2018. Contribution from crude oil amounted to $244.29 million while gas and miscellaneous receipt stood at $137.93 million and $30.12 million respectively.

“Of the export receipts, $128.76 Million was remitted to Federation Account while $283.55 million was remitted to fund the JV cost recovery for the month of March 2018 to guarantee current and future production.

“Total export crude oil and gas receipt for the period March 2017 to March 2018 stood at $4.67 Billion. Out of which the sum of $3.37 billion was transferred to JV Cash Call as first line charge and the balance of $1.31 Billion was paid into Federation Account.”

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