NNPC loses N240.3bn to maintain fuel at N145 per litre

The Nigerian National Petroleum Corporation (NNPC) is said to have lost about N240.3bn for keeping petrol pump price at N145 per litre between March 2017 and March 2018, National Daily has gathered.

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.

According to NNPC’s monthly financial report, the corporation between March 2017 and March 2018 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 litre.

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.

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, National Daily’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.