NNPC Records Huge Loss As Subsidy Exceeds Oil Revenue By N210bn In H1 2022

The Federal Government recorded zero remittances to the federation account from the Nigerian National Petroleum Commission throughout the first half of 2022.

According to a report by TheCable, the revenue of the NNPC was gulped by subsidy payments. It is more worrying that the revenue generated by the oil and gas sector was not enough to pay for the subsidies as it surpassed the revenue by N210 billion.

Within the period, the Nigerian National Petroleum Company (NNPC) Limited recorded N2.39 trillion as gross revenue from oil and gas receipts, while subsidy claims amounted to N2.6 trillion.

The Newspaper reported that Nigeria paid N1.59 trillion to cover part of the subsidy costs in the last six months — leaving an outstanding balance of N1.01 trillion to be recovered from July 2022 proceeds in August.

For the month of June, the oil company deducted N319.18 billion from the federation account as payment for petrol subsidy.

In January, February and March 2022, petrol subsidy payments gulped N210.38 billion, N219.78 billion, and N245.77 billion, respectively.

In April, Nigeria spent N271 billion andN327.07 billion in May 2022 to cater for the shortfall of the importation of petrol (subsidy).

“The value shortfall on the importation of PMS recovered from June 2022 proceeds is N 319,176,182,836,31 while the outstanding balance carried forward is N1.01 trillion,” the report said.

Further analysis showed that NNPC failed to remit revenue to the federation account as subsidy claims eroded gains.

The report noted that N564.65 billion was carried forward from the previous month as an unrecovered value shortfall and N263.95 billion from May 2022 subsidy outstanding, including N501.30 billion for the current month’s subsidy cost.

Overall, the value shortfall for the period stood at N1.32 trillion.

“Of the total figure, NNPC deducted N319.18 billion from the federation account, leaving an outstanding balance of N1.01 trillion to be carried forward and recovered from July proceeds due in August.

“The estimated value shortfall of N1 490 413 402 007 66 consisting of arrears of N 479 688 823 026 00 plus estimated June 2022 value short fall of N 1 010 724 578 981 66 is to be recovered from July 2022 proceed due for sharing at the August 2022 FAAC meeting,” the report added.

By implication, it showed that the federation is owing N1.01 trillion in outstanding subsidy claims for the half year of 2022 — despite paying a total of N1.59 trillion.