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NNPC records N82bn deficit in 2017

The 2017 financial year report of the Nigeria National Petroleum Corporation, NNPC, has revealed that the corporation had a budget deficit of N82 billion against its budgeted surplus of N601.16 billion for the year.

The report, which contained the figures, shows that the group’s operations in December ended in a deficit of N6.37 billion, which is slightly lower than the monthly deficit of N6.79 billion incurred in November.
Total revenue of N3, 711.8 billion was recorded in 2017, with a shortage of N701 billion short of the targeted revenue figure of N4, 412.8 billion for the year. Total expenses were however on target at N3, 793.8 billion for the year, showing a slight deviation of under N18 billion from the expense budget provision.

The report, as analysed by The Cable Petrobarometer, shows that budget numbers could not be delivered across a number of subsidiaries and units of the NNPC group in 2017. The upstream operators were the only sub group of the corporation that delivered a budget surplus, which amounted to N198.6 billion for the year. That was however just a fraction of a budget surplus of N688.5 billion expected from the operators within the sub group for the year.

The upstream sub group generated a total revenue of N980 billion for the 2017 fiscal year, about 82% of the targeted figure of N1,199 billion. Its expenditure went far off target at N781.5 billion or 150% of the budgeted figure of N510.5 billion. NPDC led the expenditure budget deviation with its spending of N556.6 billion standing at 191% of budget provision.

The refineries generated combined revenue of N571.3 billion at the end of 2017, which is 65% of the revenue budget for the year. Port Harcourt refinery accounted for over 65% of the total revenue and delivered the only budget surplus of N20.7 billion from the sub group in the year.
Total expenditure for all the refineries amounted to over N604 billion at the end of 2017, resulting in a combined deficit of N32.8 billion. The report shows that Kaduna and Port Harcourt refineries, which were out of production in November, were back on stream in December with major improvements in revenue contribution.
NNPC’s retail operations, led by PPMC, posted an overall deficit of close to N100 billion at the end of 2017. That was more than nine times the provided deficit figure of N11 billion for the sub group for the year. The subsidiaries here operated within their expenditure budget of N2, 328 billion but combined revenues failed to meet the targeted figure of N2, 214.6 billion for the year.
Corporate headquarters was targeted to produce a budget deficit of over N188 billion for the year but it actually produced N131.9 billion. It operated well below its cost budget with actual expenditure of N132.86 billion amounting to 68.5% of the vote for the year. A deficit of N15.8 billion from ventures swelled the total deficit for the sub group to N147.8 billion.
The deficit recorded in December is one of the biggest monthly deficits for the NNPC group in 2017. This continued to reflect inability to grow revenue significantly ahead of expenses and this cuts across a number of subsidiaries and units of the corporation. NPDC’s revenue continues to decline, even by a wider margin of 4% in December against 2.6% in November.
IDSL recovered from its revenue slump in November while NETCO and NGPTC were flat during the period. The combined revenue of refineries rebounded from a 70% fall to N13 billion in November to N66.2 billion in December.

PPMC/NPSC also remedied a drop of 28% in revenue in November and registered a leap of 66% to N215.3 billion in December. There were reasonable improvements in earnings also by head office and ventures during the month. Total expenses grew by 43% to N397.2 billion in December, only slightly below an increase of 44% in total revenue to N390.8 billion. Total expenditure in December was 125% of budgeted figure for the month.

Growth in expenses was led by PPMC with a jump of 78% to N226.3 billion in the month. The NNPC’s report said the cost increase reflects an effort to ensure steady petroleum products supply across the nation, as it is presently the major supplier of refined products.


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