Between
March 2017 and March 2018, a period of 13 months, the Nigerian National
Petroleum Corporation (NNPC) incurred a loss of N240,304,755,518.......
as
under-recovered expenditure in importing petrol at the international
market price and selling at the federal government’s regulated pump price of N145 per liter, according to the corporation’s monthly financial report.
Also,
the report, which showed that 80.26 million liters of petrol was
consumed in March 2018, also indicated that in February 2018, Nigeria’s
oil production volumes declined by about 7.588 million barrels on
account of multiple production shut-ins mostly on crude oil export
terminals and pipelines.
Under-recovery
is another term to describe subsidy, which arises as a result of the
difference between the landing cost of refined products and the official
prices.
The
corporation in its March 2018 financial and operations report – the
latest so far, indicated that it lost N240.3 billion for keeping petrol
pump price at N145 per liter at that period, and this loss represents
the amount that should be paid to it afterwards as petrol subsidy
claims, assuming the federal government is still operating the subsidy
regime.
The monthly report was released in Abuja by the NNPC and obtained by THISDAY.
According
to the NNPC report, N240,304,755,518 was recorded as under recovery for
the 13-month period; N17,619,360,579 recorded as crude oil losses;
products losses was N8,334,022,400; while pipeline repair and management
costs resulted in N129,688,449,152.
A
further breakdown of the figures indicated that in March 2017, NNPC
recorded an under-recovery of N8,206,727,836; in April, it was
N8,206,727,836; and in May, it was N7,743,923,020; and between June,
July, August, September, October, November, and December of 2017, the
corporation netted under-recoveries of N11,792,197,288; N10,250,012,947;
N7,938,985,582; N7,521,590,052; N6,848,622,525; N16,785,193,827; and
N15,676,576,185, respectively.
In January 2018, it recorded N45,782,705,844 as under-recovery; N59,519,058,738 in February; and then N34,032,433,839 in March.
NNPC said: “In the downstream sector, NNPC continued
to ensure increased petrol supply and effective distribution across the
country. In March, 2018, 2.49 billion liters of petrol were supplied by
NNPC translating to 80.26 million liters/day to sustain seamless
distribution of petroleum products and zero fuel queue across the
nation.
“The
corporation is maintaining an eagle eye on the daily or petrol
evacuation figures from depots across the nation, and engaged where
necessary the Nigerian Customs Service (NCS) through existing Joint Monitoring Team.
“In
March 2018, pipeline break stood at 224, of which 25 pipeline points
either failed to be welded or ruptured/clamped. Thus 199 pipeline points
were vandalised as against 125 recorded last month. PHC-Aba and
Aba-Enugu pipeline segment accounted for 177 points or 88.94 per cent of
the affected pipeline points.”
“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 of N851.65 billion, N672.02 billion and N6.33 billion
respectively,” said the report
The
NNPC further explained that while the country’s total oil production at
that period was 56.24 million barrels, it could not get about 7.588
million barrels to the surface and market because it had issues at the
Qua Iboe, Forcados, Bonny, Bonga, and Agbami oil terminals.
Based
on the report’s claim that the average price of crude oil at that
period was $63.37 per barrel, THISDAY’s calculations indicated that
about $480,851,560 (7.588 million barrels multiplied by $63.37 per
barrel) may have been the possible monetary loss from the shut-ins.
It stated that out of the 56.24 million barrels of crude oil
and condensate that was produced, and which represented an average
daily production of 2 million barrels, Joint Ventures (JVs) and
Production Sharing Contracts (PSC) contributed about 33.44 per cent and
38.14 per cent respectively, while Alternative Financing (AF), Nigerian
Petroleum Development Company (NPDC) and independents accounted for
13.55 per cent, 7.32 per cent and 7.54 per cent respectively.
On
the production shut-ins, the report stated that at the Qua Iboe
Terminal, about 160,000 bpd of oil was shut-in throughout February 2018
due to the aging facilities and integrity issues.
At
the Bonny Terminal, it noted that the Trans Niger Pipeline (TNP) was
shut down from February 13 to 16, 2018 due to a leak in the Bodo area
with the loss of approximately 120,000 bpd of production.
At the Forcados Terminal, it explained that about 180,000 bpd of production was deferred due to shut
down of the Trans Forcados Pipeline (TFP) as a result of leakage of hot
taps in the Oteghele axis for five days in February 2018.
The
Bonga Terminal, it noted, experienced about 55,000 bpd of shut-in due
to plant shutdown for water flood gray lock leak repairs from February 4
to 15, 2018.
In addition, it said a shut-in of 215,000bpd was experienced as a result of complete shut down for water flood gray lock leak repairs for five days at the Bonga Terminal.
At the Agbami Terminal, it said production was shut-in for seven days to mitigate the impact of wind direction on flare that set off smoke and thermal alarms resulting to the shut-in of about 24,000 bpd.
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