*NNPC, IOCs commence payment of multi-billion naira debts to NPA
*National oil company makes zero remittance so far in 2022
The Nigerian Ports Authority (NPA) has remitted a whopping N45.08 billion into the Consolidated Revenue Fund (CRF) in the last few months, out of which N26.83 billion was for its 2022 operational remittance.
On the other hand, the federal, state and local governments are in for more revenue shortages, as the Nigerian National Petroleum Company (NNPC) Limited is set to deduct a record N874.5 billion when the Federation Account Allocation Committee (FAAC) meets next month.
For the NPA, the improved revenue generation came as a result of cost cutting measures and sustained debt recovery by its new management led by its Managing Director, Mohammed Bello-Koko.
Buhari had in February approved the appointment of Bello-Koko as the substantive Managing Director of NPA.
Confirming the improved remittance yesterday, Bello-Koko told THISDAY that his background as a banker played a major role in the success of his effort to put port managers on their toes to ensure revenues due to the federal government were paid as and when due.
According to him, “The first thing we did was to improve the collection mechanism. We held the port managers responsible for revenue generation and we are holding regular virtual meetings, but what we now did was that they needed to pay us on time, pay us or we stop services and, then, we minimise cost.
“Cost minimisation was very key. The idea is if you reduce cost, you are increasing the likely surplus that you will transfer to the government.
“However, we didn’t minimise cost in areas that were relevant and necessary. We cut down on places we felt are not very important. We started prioritising more, we always prioritise, but there is more prioritisation this time around. So we pay attention to spending on things that will also increase revenue.
“Also, there is less debt now than what it used to be, because we are all getting personally involved in terms of collection. I call the port managers in the morning, in the afternoon, to ensure that we are on the same page.”
He disclosed that NPA had been able to recover legacy debts owed it by NNPC and the international oil companies (IOCs).
Bello-Koko stated, “The IOCs and other debtors have started paying their debts. NNPC alone owes NPA over N30 billion and this month we forced them to pay N7 billion. So NNPC has this rebate, 50 per cent rebate, and we do reconciliation and then they paid us.
“Since 2019 NNPC hasn’t paid us, but we have pushed them and made them know they have to pay or we stop service.
“We have become more aggressive, holding regular meetings and there are no formalities, you just pick the phone and call the port manager and say, where is the money.
“We made it clear to NNPC that they need to pay, some of them just paid and the IOCs have been paying for so long, Chevron and co. We have made it very clear that we have become more aggressive in our revenue collection and we have blocked leakages also where we are telling the IOCs that for service boat they cannot be the operator and also the agents.”
Apart from improvement in revenue generation, Bello-Koko said NPA had in the last 100 days, since his appointment, made giant strides in every facet of its operations.
According to him, “We have done a lot and key observers are testifying to this. In just 100 days, we rehabilitated and commissioned our Port Training School (PTS), furnished and equipped our control towers at the Lagos Port Complex (LPC) and TCIP.
“We have also deployed newly acquired pilot cutters and patrol boats to eastern ports, established and licensed 10 export processing terminals, established Standard Operating Procedure for barge operators and acquisition and deployment of motor cycles to monitor and enforce traffic regulations along Apapa corridor.
“Others are commencement of mapping and surveying of Warri-Koko-Sapele cannel, commencement of Escravos dredging, commenced design (repair) of the breakwater at Delta Ports, commenced rehabilitation of road D Federal Ocean Terminal, Onne, establishment of an IFRS complaint Assets Register, payment of gratuity arrears to retirees, payment of promotion arrears to serving employees.”
Bello-Koko stressed that under him, NPA had obtained ISO certification for operational areas, commenced remittance to the Sinking Fund for the takeoff of Lekki Deep Sea Port, commenced rehabilitation of ports administrative buildings at TCIP, Warri, and Rivers ports, equipped Rivers port, procured radio communication equipment for use at various signal stations, and commenced the construction of a control tower at Takwa Bay.
On NPA’s effort to prioritise export, he said the authority had created a dedicated lane for export products, adding that export has improved at Onne.
He said NPA had made effort to drive the eastern ports and would soon introduce incentives to encourage shippers to use the ports.
He said, “The Ministry of Transportation has encouraged stakeholder meetings, which took place in Port Harcourt. The essence here is to let people understand that it is not just Lagos and, logically, I do not know why people just think the only port we have is in Lagos. People need to understand that we have ports in the east and apart from selling the ports to them to encourage them to import and export through the other ports, we have to make sure that the ports are also operational.
“So, if you take only Delta port and the issue with it, which is the breakwater, and I am very sure that very soon, the design for reconstruction and rehabilitation of the breakwater will be ready.
“It collapsed about 10 years ago. They have been doing the studies and it will soon be ready. The first thing is to also ensure that we do remedial dredging at the entrance, which the federal government approved and it is already on-going at 80 per cent. They will soon finish and when they finish, that means we will be able to maintain that 7.5m draft when the dredging is done with.”
NNPC Set to Deduct Record N874.5bn from Oil Proceeds in June
Meanwhile, in the document detailing its presentation to FAAC for May, obtained by THISDAY, NNPC announced that it had deducted another N271.13 billion as shortfall for the importation of petrol in April 2022.
The NNPC document stated: “The value shortfall on the importation of PMS (petrol) recovered from April 2022 proceeds is N271, 125,127.487.58, while the outstanding balance carried forward is N371 billion.
“The estimated value shortfall of N874, 503,649.643.98 billion (consisting of arrears of N37I billion plus estimated April 2022 value shortfall of N503, 313,767,828.14) is to be recovered from May 2022 proceeds due for sharing in the June 2022 FAAC meeting.”
Furthermore, it stated that the gas cumulative outstanding to date remained $1,017,322.063.08 or an equivalent of N396.409, 715, 100.79. The huge sum, which NNPC said it spent on petrol subsidy or what it termed under-recovery, would leave it with a huge deficit.
In the same vein, at a time that oil prices have for months stabilised above $100, a rare occurrence, NNPC has, for the fourth month running, failed to remit a kobo to the federation account.
With that amount, the total deductions this year for the purpose has now hit N947.53 billion and has exceeded the company’s initial projected budget for subsidy by N799.95 billion for the first four months of this year.
Aside the N371 billion in arrears for the shortfall in April 2022, NNPC stated that an additional N503.3 billion would be removed during the June monthly FAAC conference. This would take the total amount deductible to about N874 billion.
The document further indicated that in January, February and March 2022, petrol subsidy gulped 210.38 billion, N219.78 billion, and N245.77 billion, respectively. This was expected to continue throughout the year.
With skyrocketing international oil prices, domestic fuel prices have also increased since Nigeria does not refine a drop of the products it consumes.
Recently, President Muhammadu Buhari got the National Assembly to approve N4 trillion for subsidies in 2022, up from the N400 billion initially projected for the purpose.
NNPC said for the month under review, it lifted overall crude oil of 8.8 million barrels (export domestic crude), representing a 10 per cent decrease relative to the 9.77 million barrels lifted the previous month. In addition, the national oil firm recorded that Nigeria was only able to produce 1.354 million barrels per day for the period under review, as opposed to the over 1.7 million barrels per day Organisation of Petroleum Exporting Countries (OPEC) quota.
NNPC further stated that the sum of N337.6 billion was the gross domestic crude oil and gas revenue for the month of April 2022, while recovery of strategic holding cost of N239, 381,651.39 was posted. Crude oil export revenue received in April 2022 amounted to $14.70 million, even as export revenue received during the month amounted to $29.94 million, the firm said.
NNPC said NLNG feedstock gas receipt was $76.47 million, which represented last month’s receipt $72.48 million, plus arrears of $4.26 million.
Other receipts for the month, according to NNPC, included the sum of $29.18 million being miscellaneous receipts, gas and ullage fees as well as interest income.
For context, the N874.5 billion NNPC intends to net off next month would be far higher than its contribution to the joint account of N656.6 billion shared by the entire federal government and the sub-nationals yesterday.
This development emerged as oil prices rose yesterday, extending this week’s gains, as Nigeria’s benchmark, Brent Crude, rose 2.90 per cent to $117.3 and West Texas Intermediate (WTI) sold for $113.69.
Similarly, Saudi Arabia, the world’s top crude oil exporter, on same day said it would hold the huge revenues it was currently receiving from oil sales in its current account and would not immediately spend it on development, growth, and diversification.
After years of budget deficits, when oil prices slumped in 2015-2016 and in 2020, the Kingdom is now enjoying a budget surplus, just like many oil-producing countries. Meanwhile, Saudi Arabia has booked a budget surplus of $15.3 billion (57.491 billion Saudi riyals) in the first quarter of 2022.
