Refinery Rehabilitation gulps N54.66bn as Fuel subsidy Rises to N1.593tn
The Nigerian National Petroleum Company Limited latest data has revealed that the government subsidised Premium Motor Spirit, popularly called petrol with N1.593tn between January and June 2022.
It was also gathered that the NNPCL’s pumped N54.66bn into refinery rehabilitation during the six months period.
Also Read: New Data Reveals NNPC’s Debts to FG, States Hit N1.055trn In Six Months
Figures obtained from the NNPCL’s presentation to the Federation Accounts Allocation Committee meeting for July 2022 showed that subsidies on petrol were implemented in June. The company transited from a public oil firm to a commercial entity last month.
It also made it clear in July that subsidy on petrol was now a burden of the Federal Government and not its own responsibility.
An analysis of the July presentation to FAAC showed that fuel subsidy or under-recovery/value shortfall, as described by NNPCL, rose to N1.593tn in the first half of 2022.
Figures from the report indicated that the amounts spent as subsidy on the commodity in January, February and March were N210.38bn, N219.78bn and N245.77bn, respectively.
A total of N271.59bn, N327.1bn and N319.18bn were spent as subsidy in April, May and June respectively.
On refinery rehabilitation, the oil company spent N9.11bn in January, made no expense in February and March. It invested another N9.11bn on the facility.
It spent N9.11bn in each of the months of April and May 2022 on refinery rehabilitation, while investing N18.22bn on the plant in June.
In April this year, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said the April 2023 completion date for the rehabilitation of the Port Harcourt refinery was feasible and that the plant would refine 60,000 barrels of crude by early next year.
“This project kicked off second quarter last year and where they are now is quite impressive. It is on schedule. The commitment is to deliver 60,000 barrels per day from this refinery by the first quarter of next year, and, of course, we are quite happy,” Sylva had stated while inspecting the facility.
The NNPC officially signed the contract with Tecnimont SPA for the $1.5bn rehabilitation programme of the Port Harcourt Refining Company in April 2021 and had promised that the facility would be completed in 18 months.
Meanwhile the company’s July presentation to FAAC stated that the sum of N391.529bn was the gross domestic crude oil and gas revenue for the month of June 2022.
It noted that the value shortfall on the importation of PMS recovered from June 2022 proceeds was N319.176bn while the outstanding balance carried forward was N1.01tn.
“The estimated value shortfall of N1,490,413,402,007.66 (consisting arrears of N479,688,823,026.00 plus estimated June 2022 value shortfall of N1,010,724,578,981.66) is to be recovered from July 2022 proceed due for sharing at the August 2022 FAAC meeting,” the company stated.
The Chief Executive Officer, NNPCL, Mele Kyari, had during the unveiling of the newly commercialised oil firm, stated that the company was now a private outfit and had nothing to do with FAAC anymore.
Responding to a question on what would happen to NNPC’s monthly FAAC contributions, kyari replied, “We are now a private company. Would MTN go to FAAC?”
When probed further to tell if there would be no more FAAC remittances from the company going forward, he said, “We will pay our taxes, royalties and deliver dividends to our shareholders.”
