August 24, (THEWILL) – The Nigerian National Petroleum Company (NNPC) Limited has explained why it failed to remit to the Federal Accounts Allocation Committee (FAAC) in six months despite grossing N2.38 trillion revenue during the period.
The NNPC has been the major revenue provider for the nation’s treasury being the manager of the oil and gas resources that account for over 90 percent of Nigeria’s foreign exchange earnings and over 80 percent of its budget. .
According to the FAAC report published on Tuesday August 23, 2022 NNPC Limited spent the N2.38 trillion on several projects such as repair of refineries, National Domestic Gas Development, Pipeline Security & Maintenance cost, cost recovery/cash call.
Other projects NNPC Limited expended the turnover on are Renewable Energy Development (RED), as well as Crude Oil Pre-Export Inspection Agency Expenses (NESS FEES).
This left the NNPC Limited with zero naira to remit into the coffers of the Federal accounts, with oil search (Frontier Exploration Services), Gas Infrastructure Development, Pre-Export Financing, Nigeria Morocco Pipeline also gulping part of the revenue.
Breakdown of the expenses showed fuel subsidy gulped N1.59 trillion of the total gross revenue, after subsidy payments rose to N319 billion in June 2022, from N210 billion in January 2022, while N658.97 billion was expended on cost recovery/cash call tagged T1/T2 for six-month.
The presentation of the oil corporation also showed that N12.42 billion was spent on Pipeline securities, with Oil search gulping N14.32 billion.
NNPC Limited’s failure to remit into the Federal accounts comes at a period other countries are significantly benefiting from the boom in oil price, which traded largely above $100 per barrel, following the effects of the Russia-Ukraine war.
Abu Dhabi National Oil Company (ADNOC), the United Arab Emirates state-owned oil company, saw its revenue rise 13 percent year-on-year to $1.27 billion in H1 2022, while recording $379 million net profit, which rose 34 percent year-on-year.
Speaking on the growth of ADNOC earnings, the Managing Director, Sultan Al Jaber, said, “Excellent half-year results and successful strategic execution are testaments to the vital role that the company is playing in enabling significant production capacity growth for ADNOC as well as the UAE’s objective to achieve gas self-sufficiency.”
The Aramco of Saudi Arabia generating $48.4 billion net income in Q2 this year, surpassing the $25.5 billion grossed during the same period last year.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
