Only two of the 11 subsidiaries of the Nigerian National Petroleum Corporation, NNPC were actually profitable in 2016 financial year. This according to a recent report by , a research and business intelligence firm.
In a review of the NNPC 2016 Report, BudgIT identified the NNPC Retail and the Nigerian Gas Company (NGC), as the only two subsidiaries that consistently made profits during the year.
The report indicated that:
- The NNPC recorded a loss of about N197.49 billion in 2016, with the only profit of N274 million recorded in May. While the NNPC Retail recorded a net surplus of about N7.48 billion, the NGC earned about N39.03 billion.
- The National Engineering Technical Company (NETCO) recorded profits throughout the year, except January, March and April.
- The Nigerian Petroleum Development Company, NPDC, along with Integrated Data Services Limited, IDSL and Pipelines and Products Marketing Company, PPMC recorded “an inconsistent financial performance throughout the year.”
- The Corporate headquarters, CHQs, the Corporate Strategic Unit, CSU, and three refineries in Port Harcourt, Kaduna and Warri recorded no profit throughout the year under review.
- The average capacity utilisation of the refineries stood at about 13.75 per cent, with about 22.38 million barrels of crude used to produce a total of 1.42 trillion litres of petrol and 600.55 million litres of kerosene.
- On remittances to the Federation Accounts Allocation Committee, FAAC, the report described its findings as showing a “damning difference”, with a total of $72.87 million transferred by the NNPC Group into the FAAC dollar account in 2016, against $607.82 million in 2015.
BudgIT said its review showed that NNPC remitted money into the FAAC account only six times in 2015 and 2016, despite the requirement by law for monthly remittances.
A total of about N729.02 billion was paid into the Naira denominated FAAC Account in 2016, against N1.09 trillion the previous year, with crude oil sale figures and domestic crude cost different from the receipt in both dollar and Naira accounts.
Consequently, the report said the poor performance of the subsidiaries raised critical questions about the operational activities of the NNPC Group, stressing the need to find out and address the causes of their huge losses.
Urging government to re-evaluate the performance of these subsidiaries, the report called for a cut on unnecessary operations and expenditures as well as introduction of a new robust management to turn around NNPC operations, like its peers around the world.