NNPC records N5.2bn trading surplus, pays N89.7bn as subsidy in August

The Nigerian National Petroleum Corporation (NNPC) has announced an increased trading surplus of ₦5.20billion for August 2019, just as it paid N89.7 billion as fuel subsidy on the premium motor spirit (PMS) otherwise called petrol in the same month.

The new figures are contained in the recently released August 2019 edition of the NNPC Monthly Financial and Operations Report (MFOR).

The report attributed the appreciable increase of 22 per cent within the period under review to the improved surplus posted by the Nigerian Petroleum Development Company (NPDC), an upstream arm of the NNPC.

Stating a summary of NNPC’s Group Operating Revenue and Expenditure for August 2019, the August report indicated that it increased by 7.58 per cent at ₦540.60billion, reflecting an increase of ₦38.10billion compared with the previous month’s performance.

ALSO READ: EKEDC acquires mobile transformers for improved services

It further stated that the expenditure for the month followed a similar trend with an increase of 7.46 per cent or ₦37.16billion, to reach ₦535.40billion during the year under review, declaring that the proportion of expenditure to revenue is almost at par for the current month as well as in July 2019.

Meanwhile, the corporation posted ₦233.42billion turnover on the sale of white products by the Petroleum Products Marketing Company (PPMC), the downstream subsidiary of the NNPC in August 2019, compared to ₦214.70billion sales in July 2019.

According to the report, a total of 1.92billion litres of PMS was sold in August. At a landing cost of N180 per litre in the month under review and an ex-depot price of N133.28, the sum of N46.72 per litre was paid as under-recovery or subsidy on every litre of petrol sold in August 2019.

This amounted to N89.7billion (N46.72 x 1.92billion litres) as fuel subsidy paid on imported petrol in August by the NNPC.

The NNPC assumed the role of sole importer of petrol since May 2017 due to calls by stakeholders for the deregulation of the downstream sector and the attendant challenge of fuel subsidy fraud by marketers.

Marketers had stopped fuel importation in 2017 due to non-availability of foreign exchange and increase in crude oil prices which they claimed have made it unprofitable to import and sell at N145 per litre.

Despite calls by stakeholders for the deregulation of the downstream sector, the federal government seems not ready for full deregulation but instead chose to bear the burden of subsidy payment.