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Oil revenue falls by five percent, states in trouble

Dr Ibe Kachikwu, NNPC managing director and junior minister of petroleum

Dr Ibe Kachikwu, NNPC managing director and junior minister of petroleum

The revenue of Nigerian National Petroleum Corporation (NNPC) dipped in April by 4.99 per cent to N102.45 billion from N107. 83 billion recorded in March, the agency said in a report.

The Monthly Financial and Operations Report for April was released in Abuja on Wednesday.

It states that the corporation’s expenses also dipped by 3.82 per cent to N121.88 billion compared to N126.72 billion spent in the preceding month.

It attributed the drop to pipeline vandalism which forced one of its subsidiaries, Nigerian Petroleum Development Company (NPDC), to undertake a production shut-in, which resulted in the loss of monthly crude oil revenue of N20 billion.

The report said “NPDC deficit and low revenue in the month of February to March 2016 and April 2016 was due to production shut–in, resulting to loss of entire NPDC’s revenue from crude oil sales of about N20 billion occasioned by vandalism of Forcados Export Line.”

It further blamed the poor performance on losses recorded in the operations of Pipelines and Products Marketing Company (PPMC) from the fuel scarcity recorded during the period.

It said PPMC, being the sole supplier of last resort, in its drive to bridge the petroleum products supply gap, suffered losses.

It said shortage of products compelled PPMC to sometime engage in commercially unfavourable short term arrangements.

Another major contributor to the loss was high operation costs in the Corporate Headquarters, which included expenses related to the on-going restructuring programme at NNPC, the report said.

A breakdown of the financial performance shows that in spite the shut-in, NPDC recorded a profit of N2.25 billion but Integrated Data Services Limited posted a loss of N476.06 million.

“National Engineering Technical Company Limited recorded a deficit of N167.41 million and the Nigerian Gas Company posted a profit of N4.54 billion.

“The NNPC Retail and the PPMC posted profit of N718.15 million and a loss of N6.905 million respectively,” the report states.

It said that all the three refineries recorded poor financial performances.

It noted that the Kaduna, Port-Harcourt and the Warri Refining and Petrochemical Companies posted losses of N2.28 billion, N1.81 billion and N971.04 million respectively.

It further said that the Corporate Headquarters recorded a deficit of N13.047 billion, while Corporate Service Units posted a loss of N1.28 billion.

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