The Nigerian National Petroleum Company Limited remitted literally zero funds to the Federation Account in 2022 due to the payment of subsidy on Premium Motor Spirit, popularly called petrol, the Chief Financial Officer, NNPCL, Umar Ajiya, has said.
NNPCL is a major revenue generating agency in Nigeria, operating as the national oil company in charge of the management, sales, etc, of the country’s crude oil and gas, among other key functions.
Ajiya, in a 5.24 minutes video released by the oil major on Sunday, said fuel subsidy stopped the revenue generating firm from remitting taxes and royalties to the Federation Account, as well as halted the company from making profit.
Also, NNPCL, in the documentary, said, “The lingering constraint of fuel subsidy payment hampered its (NNPCL) growth potential, until a new administration emerged, bringing an end to the subsidy regime and saving the company from bankruptcy and setting it on a path of financial prosperity.”
It stated that this enabled the oil firm to grow its profit from N674.1bn in 2021 to N2.54tn by the third quarter of 2022.
President Bola Tinubu declared during his inaugural speech on May 29, 2023, that “subsidy is gone!” The declaration by the President was immediately enforced by NNPCL the next day. NNPCL is Nigeria’s sole importer of PMS.
Reacting to this, Ajiya said, “That action of saying subsidy has gone, literally saved this nation N400bn on average every month. And what that meant was that the totality of the entitlements of tax, royalties and profits were all going into subsidy.
It was observed that N1.65bn was expended on donations; audit fees was N2bn as fines & penalties took N45bn.
Other expenses include bank charges, N675m; depreciation of other property, plants and equipment, N67.9bn; depreciation of right of use asset, N1.3bn; advertisement and publicity, N4.9bn; legal and professional fees, N8.3bn; printing and stationery, N57.5bn; rents and rates, N35bn; repairs and maintenance N219.9bn; travelling and transport, N354.2bn; minimum tax and levy, N15.65bn, write-off of property, plant and equipment, N139.8bn; postages and telephone, N3.46bn among others.
The report showed that the NNPCL Group generated a revenue of N8.82tn in 16 months and the company made a sum of N2.9tn from September 2021 to December 2022.
For the NNPCL Group, the profit before income is N1.81tn; income tax credit is N717bn. Profit for the period is N2.52tn, while total comprehensive income for the period is N4.7tn.
As for the NNPCL Company, the profit before income is N1.53tn; income tax credit is N459.7bn. Profit for the period is N1.992tn, while total comprehensive income for the period is N3.77tn.
The NNPCL Group generated N3.53tn revenue from crude oil sales; N.4.51tn from petroleum products sales; N683bn from sales of natural gas N683bn and N100.5bn from services N100.5bn.
“Revenue from crude oil sales is from sales of utilized crude during the period and liftings of equity interest in various oil assets.
“Petroleum products sales include the sale of Premium Motor Spirit, Dual Purpose Kerosene, Automotive Gasoline Oil, Naphtha, lubricants and other related products.
“Sale of natural gas represents the invoice value (transaction price) of natural gas sold to third parties. Revenue from services consists of revenue from seismic contracts, time8 based contracts, gas transmission tariffs, shipping, marine and engineering,” the report explained.
The report disclosed that the NNPCL account was audited by PricewaterhouseCoopers Chartered Accountants, SIAO Partners Chartered Accountants and Muhtari Dangana and Co. Chartered Accountants.