NNPC records trading deficit of N6.79bn in November

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NNPCThe Nigerian National Petroleum Corporation (NNPC) recorded a trading deficit of N6.79 billion in November 2017, higher than the previous month’s deficit of N0.41 billion, representing a N6.39 billion increase in trading deficit compared to the October 2017 performance, according to its financial report for the month of November 2017.

It noted that NNPC’s group operating expenses for November 2017, dropped by 23.52 per cent to N270.8 billion, from N354.08 billion recorded in October, while operating expenses dropped to N277.59 billion from N354.49 billion recorded in October.

The report blamed the drop in the NNPC financials on increased cost in upstream activities as well as reduced revenue in the downstream value chain occasioned by high crude oil inventory in refineries due to unplanned operational shutdown of Kaduna Refinery and Petrochemical Company, KRPC and Port Harcourt Refining Company, PHRC, which led to increase loss from the Refineries in November 2017.

Besides, the report also stated that downstream subsidiary of the NNPC, the Petroleum Products Marketing Company (PPMC), earned N125.73 billion from the sale of white petroleum products in the month of November 2017.

White petroleum products comprise Premium Motor Spirit (PMS) also known as petrol; Dual Purpose Kerosene, (DPK) and Automotive Gasoline Oil (AGO) also known as diesel.

According to the report, the amount from sale of white petroleum products in November was 25.4 per cent lower than the previous month’s revenue of N168.56 billion.

The report noted that the PMS accounted for 85.96 per cent of total white products sales, with N108.075 billion; followed by AGO with N13.35 billion and DPK, with N4.3 billion, representing 10.62 per cent and 3.42 per cent respectively.

On the other hand, the report stated the PPMC earned N6.18 billion from the sale of special petroleum products, Low Pour Fuel Oil, LPFO, and others. Specifically, the PPMC received N849.6 million from the sale of LPFO and N5.33 billion from the sale of other special products.

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The report added that total revenues generated from the sales of white products for the period November 2016 to November 2017 stood at N1.964 trillion, where PMS contributed about 84.91 percent of the total sales with a value of N1.668 trillion.

In volume terms, the report stated that “A total of 996.97 million litres of white products were distributed and sold by PPMC in the month of November 2017 compared with 1.353 billion litres in the month of October 2017. This comprised of 876.97 million litres of PMS, 29.67 million litres of Kerosene and 90.34 million litres of Diesel.

“Total sale of white products for the period November 2016 to November 2017 stood at 16.25 billion litres, PMS amounted to 14.19 billion litres and accounts for 87.30 percent.

“Total special products sale for the month of November 2017 was 40.76 million litres comprising of 9.08 million litres of LPFO and other special products of 31.68 million litres.”

The report maintained that products theft and vandalism had continued to destroy value and put the NNPC at a disadvantaged competitive position, adding that a total of 1,005 vandalized points were recorded between November 2016 and November 2017.

Nigeria’s refineries capacity drops to 5.6% – NEITI

The Nigeria Extractive Industry Transparency Initiative (NEITI’s) latest independent oil and gas industry audit report covering the year 2015 has noted that the refineries’ collective capacity has dropped significantly to 5.6 per cent which it said is grossly inadequate to meet the national demand.

The report further showed that out of a total 153,918 mbbls Domestic Crude Allocation to PPMC in 2015, a meagre 8,740 mbbls was allocated to the refineries, while Off-shore Processing Allocation (OPA) accounted for 89,067 mbbls, representing 57.87 per cent.

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“In 2015, the refineries utilized only 5.68 per cent of the domestic allocation while the rest was either exported or sent for offshore processing”, the report revealed.

The four state-owned refineries located in Port Harcourt, Warri, and Kaduna, have a collective capacity to refine 445,000 barrels of crude oil per day for domestic utilization.

Over the years, these refineries have grossly under-performed owing to failure of government to fix them, leading to all kinds of corruption and inefficient arrangements for refined products importation.

NEITI said it hopes that with the ongoing efforts on the part of government to fix the refineries and encourage private sector participation, the perennial fuel scarcity and its attendant negative impacts on Nigerians will soon be a thing of the past

It may be recall that the Minster of State for Petroleum Resources, Dr. Ibe Kachikwu, recently stressed the need for the country to immediately address the issues of the refineries and infrastructure deficit.

Kachikwu decried the poor state of the refineries over the years, saying: “it was shameful that a country after over 35 years cannot produce sufficient fuel for its citizens, unless we have operational refineries, there will be no permanent solution to the fuel crisis in the country”.

The call by the Minister is consistent with NEITI’s position that the refineries should be privatized for more effective and efficient performance.

The post NNPC records trading deficit of N6.79bn in November appeared first on Tribune.

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