Subsidy making us run at a loss, says NNPC

The Nigerian National Petroleum Corporation (NNPC) has revealed that it is running at a loss due to unrealized subsidy claims.

The government-run corporation in its August 2015 report revealed that it ran at a loss in July and August, losing N51.71bn and N60.67bn respectively.

The NNPC said the “monthly operational report is one of the initiatives of the corporation in its on-going restructuring efforts to ensure probity, transparency and accountability in the conduct of its business”.

In section five of the report, the NNPC said the “group operating revenue before subsidy for the months of July and August 2015 were N149.2billion and N146.6 billion respectively. This represents 48.75% and 47.91% respectively of monthly budget.”

“Similarly, operating expenditure for the same periods were N200.12billion and N207.28billion respectively, which also represents 74.92% and 77.6% respectively of budget for the months,” the report read in part.

“Operating deficits of N51.71billion and N60.67 for July and August 2015 respectively was attained as against monthly budgeted surplus of N38.91billion.”

The corporation however blamed its deficit on unrealized subsidy claims to the tune of N231b in its subsidy management analysis.

“Unrealized subsidy claims of about N231Bn for 2015 alone responsible for over 61% of the deficit recorded by the corporation.”

It also revealed that it had remitted N774.46b to the federation account in 2015, with N76.18b going to the coffers in August alone.

In production capacity, the NNPC said it produced “a total of 67.49 million barrels of crude oil and condensate in July 2015 translating to an average daily production of 2.177 million barrels”.

“A total of 445 million barrels was produced from January to July 2015 representing an average daily production of 2.099 million barrels for the same period.”

Natural gas production for the year also peaked at a total amount of 225 billion standard cubic feet (BCF) for the month of July 2015 translating to an average daily production of 8,233 million standard cubic feet per day (mmscfd).

An average of 786mmscfd was delivered to the gas fired power plants in the month of July to generate an average power of about 3,489MW compared with a 2015 YTD average gas supply 656mmscfd and power generation of 2,843MW.

The NNPC admitted that some of its businessmodels are currently inefficient and not operating at the most efficient levels that will position the company for profitability.

“Consequently, NNPC is embarking on a change agenda termed the ‘20 Fixes’ which identifies 20 critical issues that need to be addressed in order to re-position the corporation on the path of profitability,” the corporation concluded.

The NNPC GMD, Ibe Kachikwu, has revealed that the corporation under him would have sold its refineries – which succeeded in refining 3,345,992 barrels of oil in July – but for Buhari’s insistence to do otherwise.