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Fuel Subsidy: Confusion As Subsidy Returns, NNPC Pays N5. 4bn As Under Recovery In 2018

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images 2020 08 26T165946.633 Fuel Subsidy: Confusion As Subsidy Returns, NNPC Pays N5. 4bn As Under Recovery In 2018

NNPC Pays N5. 4bn As Under Recovery In 2018

Amidst confusion in the downstream petroleum industry, concerning its deregulation, subsidy on Premium Motor Spirit, PMS, also known as petrol, has once again resurfaced, as the Nigerian National Petroleum Corporation, NNPC, weekend, said it incurred N5.35 billion as under recovery in June 2018.
Under-recovery, also known as subsidy, occurs when the pump price of petrol is lower than the actual cost price of the commodity. In this case, the NNPC, through its subsidiary, NNPC Retail or through oil marketers, sell the product to motorists at a particular price, which is lower than the cost of the product, and pay itself subsidy to cushion against the loss.
According to its Monthly Financial and Operation Reports for June 2020, released weekend, the NNPC said it had recorded zero subsidy payments in April and May 2020, after it had recorded under recovery of N43.31 billion, N20.68 billion and N37.66 billion in January, February and March 2020 respectively.
The confusion stemmed from the fact that the Minister of State for Petroleum Resources, Chief Timipre Sylva, had few weeks backs, stated that the Federal Government had deregulated the downstream petroleum sector since March 2020, thereby relieving the government of the burden of fuel subsidy and giving oil marketers the freedom to determine fuel price, with guidance from the Petroleum Products Pricing and Regulatory Agency, PPPRA.
Confirming this also, Group Managing Director of the NNPC, Mallam Mele Kyari, had in April 2020, declared that fuel subsidy was gone forever, and that going forward, market forces would be responsible for determining the price of the commodity.
When contacted, Group General Manager, Group Public Affairs Division of the NNPC, Dr. Kennie Obateru, promised to provide further update on the re-emergence of under-recovery on its financials.
The NNPC June 2020 report further stated that in the month under review, the corporation earned N58.3 billion from domestic crude oil sale, from which it spent N5.35 billion on under recovery, also known as fuel subsidy.
The NNPC also recorded petroleum products loss of N1.4 billion; and pipeline repairs and management cost of N6.24 billion.
The NNPC, according to the report, also received N10.12 billion from gas and other receipts; while it recorded total remittances of N81.4 billion; spent N48.95 billion on Joint Venture Cost Recovery and Government Priority Projects; before remitting N19.46 billion to the Federation Account.
The reappearance of subsidy, according to the NNPC, was as a result of a rise in the price of crude oil in the international market, which affected the price of PMS locally.
The NNPC said, “In June 2020, the average crude oil price further increased by $10.04, or 34.7 per cent, month-on-month, m-o-m, to $38.97 per barrel. Similarly, the OPEC Reference Basket (ORB) increased by $11.88, or 47.2 per cent m-o-m, to $37.05 per barrel, while ICE Brent and NYMEX WTI rose by $8.36, or 25.8 per cent and $9.79, or 34.3 per cent, to close at $40.77 per barrel and $38.31 per barrel respectively.
“As reported in the OPEC Monthly Oil Market Report (MOMR), spot crude oil prices continued to rise in June for the second consecutive month due to improvement in physical crude market fundamentals and the gradual reduction in supply overhang. This development suggests that the first half of 2020 was ending on a more positive note than expected.”
The report added that the NNPC downstream subsidiary, the Petroleum Products Marketing Company, PPMC, sold 1.35 billion litres of white petroleum products, comprising petrol, kerosene and diesel, in the month of June 2020, valued at N134.22 billion; compared with 950.67 million litres, valued at N92.58 billion recorded in May 2020.
However, the report disclosed that the NNPC recorded a trading surplus of N2.12 billion in the month under review, dropping by 20.9 per cent, compared to a surplus of N2.68 billion recorded in May.
The NNPC report further stated that the corporation’s operating revenue appreciated by 32.05 per cent, or N76.39 billion to N314.72 billion in June, compared to N238.33 billion recorded in May 2020; while its expenditure stood at N312.95 billion, rising by 32.8 per cent or N77.30 billion, from N235.65 billion recorded in May.
The NNPC said: “June 2020 indicates a lower trading surplus of N2.12 billion compared to the N2.68 billion surplus in May 2020, when the world began a fragile recovery from the COVID-19 effect. The 21 per cent net increase in performance is attributed primarily to the 166 per cent rise in surplus posted by NPDC; reflecting ongoing global rise in market fundamentals for the second consecutive month.
“In addition, PPMC continued to enjoy the drop in average product landing cost as profit increased by 22 per cent; while takings from Nigerian Gas Company, NGC; Nigerian Gas Marketing Company, NGMC; and Duke Oil Incorporated grew by 16 per cent, one per cent and 127 per cent respectively.
“All other Strategic Business Units, SBU, recorded further loss positions with Corporate Headquarter, CHQ, deficit increasing by 71 per cent compared to last month due to increased terminal benefits made to retired staff, thus reducing the group surplus for this month.”

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#EndSars

‘Casualties Of Lekki Shootings Have Questions To Answer’ – Tinubu

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images 2020 10 25T123844.829 'Casualties Of Lekki Shootings Have Questions To Answer' - Tinubu

Casualties of Lekki Shootings have some questions to answer – Former Lagos State Governor, Bola Ahmed Tinubu speaks on the Lekki shootings.

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#EndSars

‘What Obasanjo Told Buhari At Virtual Meeting’ – Femi Fani-Kayode

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images 2020 10 25T123646.495 'What Obasanjo Told Buhari At Virtual Meeting' - Femi Fani-Kayode

Former Minister of Aviation, Femi Fani-Kayode has commended ex-President, Olusegun Obasanjo for telling President Muhammadu Buhari the truth during a meeting on Friday.
Recall that Buhari had met with former leaders of Nigeria including Gen. Yakubu Gowon, Obasanjo, Gen. Ibrahim Badamasi Babangida, Chief Ernest Shonekan, Gen. Abulsalami Abubakar, and former President Goodluck Jonathan on Friday over the tension in the country.
Giving details in a tweet on Saturday, Fani-Kayode accused Buhari of telling former leaders that #End SARS protesters were turning violent across the country:
Glad that OBJ told Buhari the bitter truth at their meeting after he claimed that the protests were turning violent. OBJ countered by telling him that the protests were peaceful until sponsored and violent thugs and hoodlums turned on the protesters and started attacking them.

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Taraba Government Declares 32- Hour Curfew On Jalingo

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images 2020 10 25T123408.373 Taraba Government Declares 32- Hour Curfew On Jalingo

Following certain bad happenings in the state and around the country, the government has decided to impose a curfew on Jalingo, the state capital to forestall further breakdown of law and order.
This was disclosed in a broadcast by the Deputy Governor, Engr. Haruna Manu on the 24th October 2020.
The government stated that the curfew will run from 11 pm on Saturday 24th October 2020 to 8 am on Monday 26th October 2020 as the government will thereafter review the situation.
Part of his speech reads thus;
“At about 5 pm in the evening of today, Saturday, the 24th day of October 2020, vandals forced their way into government warehouses and looted essential commodities meant for distribution as palliatives in the state.
“Similarly, troublemakers are continuing to lay siege on the streets of the state capital which informed the government’s decision to impose the curfew to stop the situation from degenerating into mayhem.
“As a responsible government, this step has become necessary to protect lives and properties of our dear people.
“The security agencies have been directed to be extra vigilant and stop trouble makers from seizing the opportunity to cause further destructions.
“This, they must do within the confines of the law and by protecting the human rights of our people.
“Let me specifically appeal to our teeming youths to be law-abiding so that their disposition can help government tame the hoodlums perpetuating this breach of public
peace.”
He calls on all law-abiding citizens to remain calm and not panic as their security is guaranteed.

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