NNPC records N336.83b deficit, as subsidy, crude theft increase

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BESIDE recording operational loss of N120 billion in August and September, the Nigerian National Petroleum Corporation (NNPC) suffered a N336.83 billion deficit in September in its domestic operations.

The latest financial/operations report of the corporation obtained by The Guardian, showed that huge deficit was recorded in the operations of the Pipeline Product Marketing Company (PPMC) comprising mainly claimable subsidy of N249.15 billion, rising from N231 billion recorded in the previous report.

Indeed, the report identified other causes of the deficit to include repairs and management cost of N73.97 billion and crude/product losses of N48.82 billion due to pipeline vandalism.

Besides, the NNPC paid N790.75 billion for domestic crude oil and gas and other receipts to the federation account from January to September 2015.

About $225.7 million was paid to the federation account from the sales of export of crude oil, gas and Nigerian Liquefied Natural Gas (NLNG) Feedstock for the month of August 2015 alone.

NNPC, which made this disclosure in its monthly report released at the weekend, explained that crude oil export sales contributed $108.9 million about 48 per cent of the dollar payment compared with 76 per cent contribution in previous month of July 2015 while export gas sales and NLNG feedstock accounted for $99.65 million i.e 44 per cent contribution compared with 23.7 contribution in the prior month of July 2015.

According to NNPC, the remaining $16.8 million was attributable to other dollar denominated receipts by the corporation. A total of $607.8 million has been paid so far to FAAC in the year 2015 from sales of export oil and gas.

It stated that the total export crude oil and gas receipt for the period of January to September 2015 is $3.69 billion. “Of the total receipts, the sum of $0.61billion was remitted to Federation Account while the balance of $3.09 billion was used to fund the Joint Venture (JV) Cash Call for the period. The dwindling oil price has negatively affected the NNPC Dollar contribution to the Federation Account. The continued decline in oil price led to insufficient cash available to meet JV cash calls obligations of about $615.8 million monthly as appropriated by the National Assembly. To mitigate this effect, NNPC was
compelled to sweep all the export receipt to JV Cash Call funding implying a zero remittance to federation account since the month of April 2015”, it added.

It noted that the corporation federation crude oil and gas liftings are broadly classified into equity export crude and domestic crude.

NNPC explained that both categories are lifted and marketed by NNPC and the proceeds remitted to the federation account.

“Monthly export receipts are paid directly into JP Morgan Account operated by Central Bank of Nigeria (CBN), after adjusting for calenderized Joint Venture (JV) cash calls, being a first line charge as provided in the appropriation bill; the balance is transferred to the federation account. Domestic crude oil of 445,000bopd is allocated for refining to meet domestic products supply.

“This volume is utilized through various arrangements such as domestic refining, offshore refining (Offshore Processing Arrangement: OPA), crude for product exchange and direct export. The net proceeds after adjusting for fuel subsidy, crude and product losses and pipeline repairs and management cost are remitted to the federation account”, it added.

Group operating revenue before subsidy for the months of August and September 2015 were N146.53 billion and N112.51 billion respectively.

This represents 47.88 per cent and 36.77 per cent respectively of monthly budget.

Similarly, operating expenditure for the same periods were N207.37 billion and N171.91billion respectively, which also represents 77.64 per cent and 64.36 per cent respectively of budget for the months.

It noted that operating deficits of N60.84 billion and N70.44 for August and September 2015 respectively was attained as against monthly budgeted surplus of N38.91billion.

NNPC maintained that production by the refineries in September amounted to 75.78 million litres compared to 200.25 million litres in August.

On downstream petroleum products distribution, the corporation said 507.90 million litres of white products were distributed and sold by PPMC in September compared with 606.84 million litres in August.

This comprised 456.81 million litres of petrol, 31.41 million litres of kerosene and 19.68 million litres of diesel.

Total sale of white products by the NNPC/PPMC between January and September, it said, stood at 6.41billion litres, with petrol (5.08 billion litres) accounting for 79 per cent.

During the period under review, according to NNPC, only Port Harcourt Refinery Corporation (PHRC) produced 31,008million MT of petroleum products out of 35,648 MT (261,371.14 bbls) of crude processed at an average capacity utilisation of 5.77 per cent.

Source: TheGuardian