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NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report - Politics - Nairaland

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NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Liposure: 9:43am On Mar 18
There is no evidence the huge debt has been repaid, and it highlights how the state-owned firms is run and perhaps why it returns no profit
By Aderemi Ojekunle

The Nigerian National Petroleum Corporation shelled out at least N1.45 trillion to its subsidiaries in credit sales in 2019, and there is yet no evidence the amount has been repaid more than a year after, a Dataphyte analysis has shown.

The huge amount could be handy at a time the Nigerian government is scrambling for revenue to finance its 2021 budget deficit.

In all, 12 of NNPC’s 22 subsidiaries owed trillions of naira to the parent company, an examination of their financial records show.

The monies were given for oil and gas supply, Dataphyte found.

Oil sales are Nigeria’s largest revenue source, and revenue shortages due to defrayed costs could cause a severe financial burden, including an increase in borrowings. This was evident in the corporation’s financial account, with the posting of a loss of ₦16.3 billion in 2019 while the overall Group reported a ₦20.2 billion loss. In 10 years, it reported a combined loss of ₦474 billion and ₦1.55 trillion, respectively.

NAPIMS and Kaduna refinery owe the bulk of unpaid bills
A breakdown of the credit sales showed that the loss-making Kaduna refinery and National Petroleum Investment Management Services (NAPIMS), a subsidiary managing the Nigerian government’s investments in the upstream sector, owed NNPC in unpaid bills to the tune of ₦470.08 billion and ₦534.8 billion, respectively.

Furthermore, Warri refinery (₦169.93 billion) and Nigerian Gas Company Limited (₦157.63 billion) trailed them in unpaid bills. The other subsidiaries are owing less than ₦10 billion each.

The NNPC wrote off N423 billion owed by one of its subsidiaries, the Pipelines and Product Marketing Company (PPMC). NNPC attributed it to the recapitalisation of PPMC through the transfer of the negative revenue reserve to CHQ. – captured here as well

There is yet no evidence these funds have been repaid. The spokesperson of the NNPC, Kennie Obateru, did not reply to WhatsApp messages and pick calls when contacted to explain how the National Oil Company is planning to recoup the funds.

Nigeria performs poorly among peers
Though the NNPC is producing about 2 million barrels per day (bpd), in terms of its profitability, the company’s performance pales compared to other state-owned oil firms across the world.

In 2019, Saudi Arabian Oil (Saudi Aramco) posted a profit of $330 billion, Rosneft Oil Corporation (Rosneft), controlled by the Russian Government through Rosneftegaz, posted $140bn profit while the China National Petroleum Corp (CNPC) reported $396 billion profit.

In terms of oil production within the period, NNPC and CNPC are within capacity, producing between 1.8 million and 2 million barrels per day. Within the year under review, CNPC invested in research and development, including refining and petrochemicals to record growth.

Auditor PwC, SIAO Partners, and Muhtari Dangana & Company raised concerns about NNPC’s future operations. The audit firms questioned NNPC’s sustainability plan given a compounded ₦4.4 trillion ($11.58 billion) liability margin over its assets.

Impact of NNPC’s financial performance on Nigeria’s revenue and economy
As of Q3 2020, Nigeria’s debt profile stood at ₦32.22 trillion. For Nigeria to ensure financial flexibility, it needs to increase its revenue by running a viable and profitable oil firm.

Last year, the International Monetary Fund (IMF) described high fiscal deficits as complicating Nigeria’s monetary policy. The Bretton Wood institution advised the country to perform “major policy adjustments necessary to contain short-term vulnerabilities, build resilience, and unlock growth potential.”

NNPC’s ₦1.4 trillion credit sales tie down much-needed revenue by the government. This huge amount of unpaid debts by NNPC’s subsidiaries is worth a substantial part of Nigeria’s annual budgets, and can significantly reduce the country’s rising debt profile.

Findings also revealed that a quarter of the subsidiaries’ debts could have helped Nigeria to clean up the oil spills that plagues human and marine life in Ogoni land. The United Nations Environment Programme (UNEP) report had estimated an initial $1 billion (₦394.74 billion) for the cleanup.

Going by estimates from the National Primary Health Care Agency (NPHCDA) and fact checks by Africa Check, the fund held by these owing subsidiaries could have established 50,000 additional primary health centres and equip them with modern facilities. Also, at an estimated cost of ₦11 million each, it could have built 127,000 units of 3-block classrooms across the country.

Presently, Nigeria is estimated to have a deficit of 17 million houses; if channelled into it, the government could have built over 100,000 3-bedroom apartments (flat/bungalow) at an average cost of ₦15 million each across the country. A better-managed national oil firm could generate the much-needed revenue to fix many other infrastructural deficits as this in the country.

How to correct anomalies
Atiku Samuel, a policy analyst, decried a porous inventory management system at the NNPC that was responsible for shady receivables. He said the inefficiencies in supply chain management created room for corruption and a lousy audit control system.

“If NNPC does not even know the amount of oil leaving Nigeria, how would the state-owned oil firm be able to audit the supply of crude and gas and collect appropriate revenue?” he asked.

“Generally, NNPC is poorly run, and its supply chain management is one of the most terrible in the world; it is old-fashioned and not driven by technology.”

Mr Samuel called for an independent agency that will cross-check the entire audit system of NNPC and design architectural framework with oversight and adequate capturing of the supply chain.

He said this would ensure openness in the national oil company’s activities and drastically reduce the impact of its inefficiencies on citizens.

In its policy recommendation on NNPC Audit Reports, industry experts at the Facility for Oil Sector Transparency and Reform in Nigeria (FOSTER) called for the unbundling of subsidiaries to allow NNPC optimise its commercial efficiency. This is to ensure higher revenues for the benefit of the country.

Overall, a quick passage of the long-awaited Petroleum Industry Bill (PIB) would reposition the state-owned oil firm to run efficiently, and provide the template for restructuring the oil industry, thereby eliminating the usual causes of the country’s revenue shortages from the oil sector considerably.

In essence, the Nigerian citizenry can also enjoy a higher quality of life through its government’s provision of adequate infrastructure, funded in part by increased revenues from an efficiently run oil industry.

https://www.premiumtimesng.com/news/top-news/449537-nnpc-subsidiaries-received-n1-45-trillion-in-credit-sales-in-2019-report.html

Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Liposure: 9:51am On Mar 18
Gbese

1 Like 1 Share

Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Queenslander(f): 9:55am On Mar 18
Dead country,.

2 Likes 1 Share

Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Nobody: 11:24am On Mar 18
Overall, a quick passage of the long-awaited Petroleum Industry Bill (PIB) would reposition the state-owned oil firm to run efficiently, and provide the template for restructuring the oil industry, thereby eliminating the usual causes of the country’s revenue shortages from the oil sector considerably.

PIB is a brilliant document, except that it does not allow for removal of subsidies...aka deregulation. Which is the only fly in the soup so to speak.
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Liposure: 11:44am On Mar 18
Subsidybad21:


PIB is a brilliant document, except that it does not allow for removal of subsidies...aka deregulation. Which is the only fly in the soup so to speak.
removal will end monopoly
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Liposure: 1:08pm On Mar 18
OAM4J
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Racoon(m): 1:39pm On Mar 18
Shared monies yet they are telling a cash strapped nation of how they tend to put up national assets and perhaps the citizens for sale on OLX/ebay to get money to fund next year budget.Crooked criminals just cashing out.
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Racoon(m): 1:44pm On Mar 18
Overall, a quick passage of the long-awaited Petroleum Industry Bill (PIB) would reposition the state-owned oil firm to run efficiently, and provide the template for restructuring the oil industry, thereby eliminating the usual causes of the country’s revenue shortages from the oil sector considerably.
Every successive government have foot dragged on this petroleum downstream sector regulation bill(PIB) because all NNPC and all its subsidiaries are channels for unending exploitation and corruption.

Just pass this bill though it will not directly take away subsidy but it will definitely reduce the horrendous corruption associated with it.

1 Like 1 Share

Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Queenlovely(f): 1:51pm On Mar 18
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Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by MANNABBQGRILLS: 1:51pm On Mar 18
If NNPC does not even know the amount of oil leaving Nigeria, how would the state-owned oil firm be able to audit the supply of crude and gas and collect appropriate revenue?

2 Likes 2 Shares

Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Bornsinner7: 1:51pm On Mar 18
Damn niggarr
Is not alright..

Slawomiir what do you have to say after fueling your invisible lexus, GLK and venza.. This money loud!!!
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by hesoxa: 1:52pm On Mar 18
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Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by sematec(m): 1:52pm On Mar 18
NNPC is clearly run by corrupt minds.

1 Like

Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Monogamy: 1:54pm On Mar 18
We only know when they receive money... Why no give us details of how the money was spent m
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by RenerdsMedia: 1:54pm On Mar 18
Coming...
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Jh0wsef(m): 1:54pm On Mar 18
Lol
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by passyhansome(m): 1:57pm On Mar 18
This country na cruise, I have never seen a lawless country as ours even Sodom and Gomorrah no do reach us
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by lexy2014: 2:05pm On Mar 18
MANNABBQGRILLS:
If NNPC does not even know the amount of oil leaving Nigeria, how would the state-owned oil firm be able to audit the supply of crude and gas and collect appropriate revenue?

I thought buhari is d supervising minister in charge of nnpc?

1 Like

Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by gambia(m): 2:06pm On Mar 18
This country is complete finished. Buhari is a FAILURE, any day , any time.
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Nobody: 2:06pm On Mar 18
WTF is the senate doing
PIB needs to be passed,... it’s will be a welcome development
Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Racoon(m): 2:27pm On Mar 18
MANNABBQGRILLS:
If NNPC does not even know the amount of oil leaving Nigeria, how would the state-owned oil firm be able to audit the supply of crude and gas and collect appropriate revenue?
Who is in charge? Who is the minister of petroleum? Tell us it is your corrupt darling daddy

1 Like

Re: NNPC Subsidiaries Received N1.45 Trillion In Credit Sales In 2019 — Report by Reference(m): 2:39pm On Mar 18
The steady stream of sordid, disgusting stories overflowing from government into the streets like broken sewer lines that cannot provoke a reaction of the passing public other than to cover their noses in abject repulsion is pointless.

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