The Nigerian National Petroleum Corporation (NNPC) spent N5.348bn in Junefigures from the corporation’s website have shown. The oil firm made an under-recovery of this year despite the halt in subsidy in March this year and which saw the Petroleum products Pricing Regulatory Agency (PPPRA) introducing a varied pricing regime. Through the new pricing regime, the PPPRA adjust petrol prices monthly in accordance with movement in price of crude oil.
Under-recovery is the losses incurred by the oil firm due to the difference between the subsidised price at which the corporation sells petrol and the price which it should have received to meet its production cost.
But data contained in the latest June 2020 financial and operations report of NNPC showed that the corporation incurred N5.348bn as subsidy on imported petrol in June.
The NNPC is the major importer of petrol into Nigeria, according to oil marketers. In fact, the corporation was the sole importer of the commodity before March 19, 2020.
Further findings showed that in January, February and March 2020, the oil firm incurred N43.31bn, M20.68bn and N37.66bn respectively as under-recoveries.
It, however, posted zero under-recovery in the months of April and May 2020, based on receipts and payments for the months.
But in June 2020, it incurred over N5bn as under-recovery, a development that showed it spent that much on petrol subsidy in that month.
In April this year, the Group Managing Director, NNPC, MeleKyari, hinted at a possible deregulation of the downstream oil sector.
He said the Federal Government had eliminated subsidy and under-recovery in the industry.
The Group General Manager, Group Public Affairs, Division, NNPC, KennieObateru, explained that the return of under-recovery in June was due to the payment for stock held by marketers at the onset of the removal of subsidy by the Federal Government.
“Since the subsidy removal started with reduction in pump price, marketers have been paid the differential of the PPPRA verified stock they held and it is spread over a period of six months,” he said.