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 litre, according to the corporation's monthly financial report.
Also, the report, which showed that 80.26 million litres 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 litre 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.
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 litres of petrol were supplied by NNPC translating to 80.26 million litres /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, 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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