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NNPC’s deficit spending keeps growing

NNPC’s oil and gas report for October 2017 shows a further increase in the corporation’s overall deficit spending — despite a drop during the month compared to September.

An analysis by TheCable Petrobarometer shows that overall deficit spending figure climbed higher from N68.43 billion at the end of September to N68.84 billion at the end of October.

Total revenue grew by 13.1% from N2,696.10 billion in September to N3,050.19 billion at the end of October, while total expenses grew by 12.8% to N3,119.02 billion over the same period.

The corporation’s revenue budget of N3,677.35 billion for the period was undershot by N627.16 billion at the end of October, increasing the margin from N614 billion at the end of September.

NPDC, the upstream subsidiary recorded a strong growth of over 21% in revenue to N501.63 billion but remained significantly shot of budget target of over N714 billion for the end of October.

Its revenue shortfall however declined from N228.4 billion at the end of September to N212.43 billion at the end of October.

Some enhanced performance also came from Nigerian Gas Processing and Transportation Company (NGPTC), which grew revenue ahead of expenses during the review period.

Its revenue grew by 12.2% to N226.09 billion while expenses grew by 10.7% to N168.86 billion over the review period.

The subsidiary is still bursting its expenditure budget but it has improved its surplus from N48.81 billion in September to N57.23 billion.

Refineries’ poor showing at the end of September worsened in October with expenses growing ahead of revenue.

Kaduna and Warri refineries grew their deficits further while the surplus figure from Port Harcourt refinery declined during the period.

That multiplied the deficit figure for the refineries from N2.84 billion in September to N10.60 billion at the end of October.

NNPC’s retail operations ended the period with a total revenue of N1,798.50 billion, increasing its deviation from budget from N82 billion at the end of September to N130.30 billion.

Compared with a planned budget deficit of N25.12 billion for PPMC/NPSC, the actual figure was close to N94 billion at the end of October.

Revenue figures from corporate headquarters (CHQ) and ventures remained quite disappointing compared to budget provisions and these units remain loss leading centres for the corporation with expenses far in excess of revenue.

The deficit from the sub group grew from N111.39 billion at the end of September to N119.41 billion at the end of October.

Expenditure lines remained generally ahead of budget provisions for NNPC during the period. That overturned a planned overall budget surplus of N501 billion at the end of October to an overall actual deficit of N68.84 billion for the period.

Subsidiaries bursting expenditure ceilings include NPDC, which overshot its budget by over N177 billion at the end of October, rising from N121.24 billion at the end of September. NGPTC over spent its budget by N12.76 billion.

Kaduna refinery also exceeded its budget expenditure line by N25.43 billion at the end of October. Only the Port Harcourt refinery spent both below its revenue and below its budget target as at the end of October.

Retail unit continued to provide a cost saving line for NNPC, raising the margin of below budget spending from about N72 billion in September to N82.51 billion in October.

This again compensated for excess spending by PPMC/NPSC, leaving the deficit for the sub group only slightly increased at N90.86 billion at the end of October.

Mike 'Uzor :