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Fuel Subsidy Hits N1.03Trn In 10 Months

The Nigerian National Petroleum Company (NNPC) Limited has reported that total payments on fuel subsidy in the 10-month period from January through October this year totalled N1.03 trillion.

This is even as it stated that it would deduct N199 billion being October 2021 under-recovery from its November 2021 remittance to the Federation Account.

The oil company made these disclosures in its latest report presented to the Federation Accounts Allocation Committee (FAAC) meeting in November 2021.

In the report, NNPC referred to its subsidy spending as under-recovery.

An analysis of the latest report by the NNPC showed that while nothing  was provided for as under-recovery of the PMS/value shortfall in January this year, the oil company spent N25.374 billion, N60.396 billion and N61.966 billion in February, March and April respectively.

Also, it reported that in May, June and July, under-recoveries (petrol subsidies) value stood at N126.298 billion, N164.337 billion and N103.286 billion respectively. Similarly, the company reported N173.132 billion, N149.283 billion and N163.709 billion as petrol subsidy spending/value shortfalls in August, September and October respectively.

According to the latest report, the total crude oil lifting stood at 11.49 million barrels (export and domestic crude) in September, representing 98.5 percent increase over the 5.79 barrels lifted in the preceding month while the country’s total oil production stood at 1.417 million barrels.

However, the company did not state the crude oil export revenue for the month of September as sales receipt in the report but indicated in the report to the FAAC that domestic gas and other receipts in the month totaled  N6.78 billion.

The corporation further reported that the domestic gas receipt in the month was N4.07 billion, adding that feedstock valued at $59.43 million was sold to Nigeria Liquefied Natural Gas company during the period, out of which $52.57 million was received during the month.

For other receipts, the state-owned oil company reported that the sum of $95.63m being miscellaneous receipts, gas and haullage fees and interest income were received in October 2021.

It clarified: “The sum of N252,968,629,898.13 was the gross domestic crude oil and gas revenue for the month of October 2021

“The recoveries were strategic holding cost and pipeline repairs amounting to N7,757,631,778.84; product losses worth N143,386,571.87 and value short fall of N163,709,314,928.61 (this comprised of the N123,709,314,928.61 for September 2021 and N40,000,000,000 value shortfall deferred in June 2021.

“The October 2021 value shortfall of N199,007,758,422.75 is to be recovered from the November 2021 proceeds due for sharing at the December 2021 FAAC meeting”, the company added.

It would be recalled that in the past few years, the NNPC has remained the major importer of fuel into the country as Forex and other constraints had made it difficult for other marketers to import fuel into the country.  the commodity due to their inability to adequately access the United States dollar.

 

 

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