The Nigerian National Petroleum Corporation (NNPC), in seven months this year, spent a total of N1.165 trillion on fuel subsidy, oil exploration and remittance to the Federation Account Allocation Committee (FAAC).
According to the corporation’s monthly FAAC report for September, the three expenditure items by NNPC gulped 57 per cent of the total revenue distribution of N2.043 trillion in the first eight months of 2021. The balance of N878 billion was distributed for other expenditures, including crude oil lifting inspection expenses.
On subsidy which NNPC describes as under-recovery of Premium Motor Spirit (PMS) value shortfall, the corporation spent N714.791 billion within seven months, from February to August.
While there was no subsidy spent in January, NNPC spent N25.37 billion in February which figure rose nearly three times in March to N60.396 billion. The corporation then spent N61.966 billion in April which more than doubled to N126.298 billion in May, following a reported higher rise in the landing cost of imported petrol.
The corporation further incurred a higher cost in petrol subsidy of N164.337 billion in June but declined to N103.286 billion by July; however, by August, the gain was reversed when subsidy cost rose to N173.132 billion , the highest figure published so far.
The Minister of State, Petroleum Resources, Timipre Sylva, has continually reiterated that the government was committed to ensuring the total removal of subsidy from next year, especially with the implementation of the Petroleum Industry Act (PIA) as Nigerians await the impact of the decision.
Frontier exploration gulps N20bn
NNPC also spent N20.681 billion on frontier oil exploration in seven months with the highest expenditure done in August. While it spent N1.964 billion on exploration activities in January, the bill slightly dropped to N1.920 in February but rose to N2.250 billion in March.
There was no expenditure on oil exploration in April but the figure rose to N3.216 billion in May, and dropping to N2.715 billion in June. While oil exploration expenses dropped to N2.443 billion in July, it rose by three times in August to N6.167 billion.
FAAC gets N429bn 7 months
The corporation also remitted N429.284 billion oil proceeds to the FAAC for seven months during the period as it skipped remittance in April.
The breakdown of the remittance shows that NNPC remitted N90.860 billion in January, but that dropped to N64.161 billion in February, and further depleted to N41.184 billion in March 2021.
The expected remittance in April was reported to have been used for subsidizing petrol pump price per litre to keep it at the 162 to N165 price band.
By May, the remittance to FAAC dropped to N38.608 billion but rose significantly to N47.162 billion in June and higher to N67.280 billion in July before climaxing at N80.030 billion in August.
