The Nigerian National Petroleum Corporation (NNPC) has incurred about N9.4billion in subsidy since Tuesday last week going by its own admission that it has ramped up petrol import by 52million litres daily to tackle an embarrassing fuel scarcity that marred the holidays.
According to the NNPC, 52million litres of daily petrol importation translates to 364million litres in 7 days and a subsidy of N26 on each litre amounts to N9.4billion. This pattern of imports could balloon NNPC’s deficits and impair its ability to make a significant contribution to the Federation Account.
Yemi Osinabjo, Nigeria’s Vice President had hitherto clarified on Monday that the Federal Government was not bearing the subsidy on the importation of petrol products in response to BusinessDay’s question on who is bearing the subsidy of N26 per litre, the NNPC had claimed is for each litre of petrol.
“NNPC is trading in fuel; the federal government is not, at the moment, paying for any subsidy,” Osinbajo said.
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“If you are buying and selling fuel, you would have to be able to pay for it. So, it’s not a question of government provision for subsidy. And don’t forget that the way that the NNPC trades is that, in many cases, NNPC is actually giving fuel; there are 445,000 barrels of fuel. So really what you are seeing, in many cases, is more or less an exchange for PMS. So at the moment, NNPC is paying the cost.”
On the volume of products available for supply, the Maikanti Baru, NNPC GMD said last week that 13 vessels laden with over 650 million litres of products were discharging their contents at the seaport while additional vessels have been lined up to berth early January 2018.
Baru further said that 814 million litres of petrol were currently being injected into the system to guarantee nationwide elimination of fuel queues before the end of the year.
“Within the last two weeks, the national truck out capacity had been jerked up to an average of 1,500 trucks, translating to 52 million litres per day which is much higher than the normal consumption of 850 trucks per day across the various depots in the country. Also, the Corporation has emplaced a 24-hour loading and sales operations in all depots and NNPC Mega Stations across the country while marketers have been instructed to do same,” the NNPC said in a statement.
However, the implication of this import spree would be obvious in March 2018 when the NNPC publishes its monthly and financial performance for December 2017 and if previous figures are any indication the Corporation’s deficit will be through the roof.
In its September publication, the NNPC recorded a trading deficit of ₦2.81 Billion which is lower than the previous month’s deficit of ₦ 5.74 Billion. Except for a few months, this trend of deficits has been maintained since it started publishing the reports since August 2015.
NNPC is allocated 445,000bopd for refining to meet domestic products supply. Payments are effected to Federation Account by NNPC after adjusting crude and product losses and pipeline repairs and management cost incurred during the period.
Ramping up petrol imports in these volumes could result in a significant decline of NNPC contribution to the Federation Account.
Last month, the 36 states in Nigeria boycotted the monthly Federal Account Allocation Committee (FAAC) meeting due to discrepancies in figures presented by the federal government.
Acting on the directive from their governors, the finance commissioners of the various states agreed walked out of the meeting pending the reconciliation of all accounts.
One of the commissioners confided to the News Agency of Nigeria that the said discrepancies came from the figures presented by the Nigerian National Petroleum Corporation (NNPC).
ISAAC ANYAOGU
