Business

Petrol subsidy gulps N99bn in 11 days

Nigeria has lost N99 billion to subsidy on premium motor spirit (PMS) also known as petrol in the first 11 days of April, 2021. Data from the Nigerian National Petroleum Corporation (NNPC) sighted by New Telegraph at the weekend, which showed this, added that the landing cost for PMS rallied at N234 per litre in the month of April, same price it has been since March.

Stating that an average of N129.6 billion was spent on subsidy monthly, including February, the document showed that an average of N9 billion daily is spent on subsidy.

 

This shows that N99 billion has been spent in the last 11 days. The document reiterated that an increase in pump price of fuel was inevitable.

 

Group Managing Director of NNPC, Mele Kyari, had earlier confirmed this on March 24 during the weekly media briefing at the Presidential Villa, maintaining that the current landing cost of fuel in the “country as at today (Thursday, March 24) stands    at N234 per litre while the recommended retail price is N162 per litre.”

 

He added that the daily volume of fuel consumed in the country stands at 60 million litres. By this calculation, NNPC is actually paying N129.6 billion as differential between the actual cost and recommended retail price monthly, even when the GMC refrained from calling the balance a subsidy.

 

Kyari, however, said that the Corporation may no longer have the capacity to continue to shoulder the differences and, as such, would soon have to shift it to the consumers.

 

NNPC also announced an increase of 80.12 per cent in trading surplus for the month of December 2020, which stands at ₦24.19 billion compared to the ₦13.43 billion surplus recorded in November 2020.

 

This was contained in the December 2020 edition of NNPC’s Monthly Financial and Operations Report (MFOR), according to a press release by the Group General Manager, Group Public Affairs Division of the Corporation, Dr. Kennie Obateru. Trading surplus or trading deficit is derived after deduction of the expenditure profile from the revenue in the period under review. According to the report, the operating revenue of NNPC Group in December 2020 as compared to November 2020 increased by 33.44 per cent or N137.00 billion to stand at N546.65 billion. Similarly, expenditure for the month increased by 27.54 per cent or N112.81 billion to stand at N522.47 billion. The December 2020 expenditure as a proportion of revenue was 0.96 as against 0.97 in November 2020.

 

The report indicated that the 80.12 per cent increase was due mainly to the significant rise in the profit of NNPC’s flagship upstream entity, Nigerian Petroleum Development Company (NPDC), amid improved market fundamentals and strong global demand for crude oil.

 

Other contributory factors to the robust trading surplus recorded in the month under review include the improved performance by Nigerian Gas Marketing Company (NGMC), Petroleum Products Marketing Company (PPMC), National Engineering and Technical Company (NETCO) and Duke Oil Incorporated, which recorded noticeable gains in their operations.

 

In the downstream, 2.26 billion litres of white products were sold and distributed by PPMC in the month of December 2020 compared to 1.72 billion litres in the month of November 2020. This comprised 2.254 billion litres of petrol, translating to  72.72 million litres/day, 11.40 million litres of Automotive Gas Oil (diesel) and 0.48 million litres of kerosene.

 

Total sale of white products for the period of December 2019 to December 2020 stood at 18.456 billion litres and petrol accounted for 18.325 billion litres or 99.29 per cent.

 

In monetary terms, the volume translates to a value of ₦288.77 billion recorded on the sale of white products by PPMC in the month of December 2020 compared to ₦226.08 billion sales in November 2020.

 

Total revenue generated from the sales of white products for the period December 2019 to December 2020 stood at ₦2.217 trillion, where petrol contributed about 99.09 per cent of the total sales with a value of ₦2.197 trillion.

 

In December 2020, 43 pipeline points were vandalized representing about 18.60 per cent increase from the 35 points recorded in November 2020.

 

Mosimi Area accounted for 56 per cent of the vandalized points while Kaduna Area and Port Harcourt accounted for the remaining 33 per cent and 12 per cent respectively.

 

In the gas sector, natural gas production in December 2020 stood at 213.34billion cubic feet (bcf) translating to an average daily production of 6,881.83 million standard cubic feet of gas per day (mmscfd).

 

The daily average natural gas supply to power plants increased by 3.52 per cent to 816mmscfd, equivalent to power generation of 3,445MW. Out of the 208.61BCF of gas supplied in December 2020, a total of 146.72bcf was commercialised; consisting of 42.90bcf and 103.82 bcf for the domestic and export market respectively.

 

This translates to a total supply of 1,383.93mmscfd of gas to the domestic market and 3,349.00mmscfd of gas supplied to the export market for the month.

 

This implies that 70.33 per cent of the average daily gas produced was commercialised while the balance of 29.67 per cent was re-injected, used as upstream fuel gas or flared.

 

Gas flare rate was 6.80 per cent for the month under review (i.e. 457.25 mmscfd) compared to average gas flare rate of 7.15 per cent (i.e. 538.59 mmscfd) for the period December 2019 to December 2020.

 

The 65th edition of NNPC MFOR highlights the Corporation’s activities for the period of December 2019 to December 2020. In line with the Corporation’s commitment of becoming more accountable and transparent, the Corporation has continued to sustain effective communication with stakeholders through the MFOR, which is published on the corporation’s website, national dailies, as well as independent online news portals

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