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Refineries Record Deficit as NNPC Lifts $407.15m…

by with No Comment financeNews

Refineries Record N5.4bn Deficit, As NNPC Lifts $407.15m Crude

Amidst controversy over the state of the nation’s refineries the latest report of the Nigerian National Petroleum Corporation, NNPC, has indicated that Nigeria’s three refineries guzzled a total of N5.86 billion in overhead expenses on zero output in the month December 2020 alone.

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This expenditure eventually resulted in operating deficit of N5.37 billion by the refineries, the report stated. The three refineries are those of Kaduna, Warri and Port Harcourt.

The Federal Government has awarded contract for rehabilitation of Port Harcourt refinery at a cost of USD1.5 billion, a figure considered by most industry experts as outrageously high while condemning the high cost of maintaining the offices in the refineries with zero output over the years.

According to the NNPC report “in December 2020, NNPC lifted 7,538,735 barrels of crude oil from the daily allocation for domestic utilization translating to an average volume of 243,185 barrels of oil per day.”

The report further stated that in order to meet domestic product supply requirement for the month of December 2020, the entire 7,538,735 barrels were processed under the Direct Sales-Direct Purchase, DSDP, scheme while no deliveries to the domestic refineries for processing, meaning no crude was processed by the country’s three refineries.

Meanwhile, the report said the total value of crude oil lifted on the account of Nigerian National Petroleum Corporation, NNPC, in December 2020 was $407.15 million latest report by the Corporation has shown.

NNPC in its Monthly Financial and Operations Report for January, 2021 said of the 12.16 million barrels lifted on its account in December 2020, 7.54 million barrels and 0.50 million barrels were for domestic and export markets respectively.

The report explained that at an average oil price of $50.78/barrel and exchange rate of N379/$, the domestic crude oil lifted by NNPC “is valued at $382.8 million or a Naira equivalent of N145.1 billion for the month of December 2020.

The remaining crude oil lifted for export was valued at $24.3 million at an average price of $48.92/barrel. The report added that from December 2019 to December 2020, a total volume of 708 million barrels of crude oil and condensate was lifted by all parties.

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Exports

First trade deficit in 4yrs as COVID hurts exports

by with No Comment Businessfinance

Nigeria records first trade deficit in 4yrs as COVID-19 hurts exports

Africa’s largest oil producer posted a N7 trillion trade deficit in 2020, with exports falling as much as 35 percent, according to data published, Tuesday by the National Bureau of Statistics.

For the first time in four years, Nigeria’s trade position was negative in 2020 as the pandemic crushed oil demand and sent the revenues of oil exporting countries tumbling.

READ ALSO: Nigeria can save N3.7trn by gutting inefficient MDAs

Africa’s largest oil producer posted a N7 trillion trade deficit in 2020, with exports falling as much as 35 percent, according to data published, Tuesday by the National Bureau of Statistics.

That compares to a surplus of N2.23 trillion recorded in 2019, with imports outweighing the county’s value of export.

A trade deficit occurs when a country’s imports exceed its exports during a given time period.

When that happens, the said country is denied the gains of foreign exchange which comes from the exports of commodities to other trading countries.

The huge trade deficit largely explains why Nigeria’s naira ran into troubled waters last year as Africa’s most populous nation was starved of the needed foreign exchange that would have helped in the accretion of the external reserves, and give monetary authorities the legroom to defend the naira from falling against the dollar.

Nigeria’s trade balance stood at N32.4 trillion with imports rising 17.32 percent to N19.9 trillion in 2020 from the N16.96 trillion in 2019, while exports fell 34.75 percent to N12.5 trillion from N19.2 trillion in 2019.

The last time the country witnessed a deficit in its trade was in 2016, when a collapse in the oil market and a restiveness back home in the Niger Delta region, slowed the growth of oil exports, the country’s biggest export commodity.

At that time, Nigeria recorded a deficit of N290 billion.

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