The burden of under-recovery of petrol price currently being borne by the Nigerian National Petroleum Corporation, NNPC, may have begun to affect its operations as the Corporation failed to fund six of its scheduled projects in April.
The funding performance from January to April, contained in the corporation’s presentation to the Federation Account Allocation Committee, FAAC, in May, showed that the gas infrastructure development, frontier exploration services and renewable energy development received zero allocation for the month.
In addition, the Nigeria-Morocco pipeline, the crude oil pre-export inspection agency expenses as well as Brass LNG gas supply project did not get any funding for the period under review.
The data indicated that with the underfunding of the projects, variance in terms of actual budget and actual funding for five of the projects stood at N26.236 billion. The figures for Brass LNG were not recorded.
The document showed that except for Brass LNG, the NNPC has consistently funded the projects until February when it recorded the payment of petrol under-recovery of N25.374 billion, N60.396 in March and N61.966 in April.
It stated that with an annual budget of N4.9 trillion and a monthly budget of N414.941 billion, as at the first four months of the year, the corporation had spent N767.7 billion, actual year-to-date, with a difference of N891.99 billion.
In January, the NNPC spent N195.6 billion, in February its spending fell to N191.1 billion, in March it was N224.5 billion, while in April it expended N156.3 billion.
However, the funded projects in April were: national domestic gas development, which got N14.9 billion cumulative spendings, pipeline security and maintenance cost which gulped N13.7 billion, pre-export financing of N20 billion, under-recovery of N147.7 billion, among others.
From January to April, refinery rehabilitation for the non-functional facilities had gulped N33.3 billion. The NNPC had explained that it was still paying workers’ salaries and basic maintenance for the refineries.
With an annual budgeted total net distribution to FAAC of N1.47 trillion and monthly budget remittance of N122.7 billion, the document showed that in January, NNPC remitted N90.86, in February it sent N64.1 billion to FAAC and in March remitted N41.1 billion. There was zero remittance in April.
For March, domestic crude payable in June, in line with the 90-day circle, showed that an outstanding of Joint Venture (JV) for Chevron Nigeria Limited, amounting to N72.6 billion, is due in June.
Eroton will be paid N3.1 billion, Mobil’s is N68.5 billion and is due this month, same for Seplat, which is expected to get N3.3 billion, Shell will be paid N33.6 billion, while Total is expected to be paid N3.1 billion.
In March, the NNPC Group Managing Director, Mele Kyari, opened up on the state of affairs at the corporation, saying that at the time, the government was subsidising petrol with about N120 billion monthly.
He said the NNPC could no longer afford to bear the cost and Nigerians would have to pay the actual cost sooner or later, as market forces must be allowed to determine the pump price of petrol.
“Today, NNPC is the sole importer of petrol. We are importing at market price and we are selling at N162 per litre today. Looking at the current market situation today, the actual price could have been anywhere between N211 and around N234 per litre”.
“This means that consumers are not paying for the full value of the petrol that we are consuming and therefore, someone is bearing that cost. As we speak today, the difference is being carried on the books of the NNPC and I can confirm to you that the NNPC may no longer be in the position to carry that burden and because we can longer afford to carry it on our books,” he had said.