PPMC Recorded N687.1bn Revenue Deficit In 2012

The N3.04tn operational expenditure of the Pipelines and Products Marketing Company in 2012 was N687.1bn in excess of its total revenue for the year.
The company, which is a subsidiary of the Nigerian National Petroleum Corporation, entered a total full year revenue performance of N2.35tn, despite projecting the sum of N3.04tn at the beginning of the year.
These details were contained in the budget document of the NNPC deposited with the National Assembly Joint Committee on Petroleum (Downstream).
Explaining the high operational expenses, the management of NNPC said it was due to high crude cost, pipeline vandalism, crude and product losses and demurrage.
It blamed the low revenue performance on pipeline vandalism, even though it indicated an expectation of increase in revenue by 25 per cent in 2013.
Incidentally, the corporation is planning to also increase the value of its operational expenses by 19 per cent this year.

This implies that while it has projected a total of N3.8tn as expected revenue for the year, its operational expenses have also been fixed at N3.355tn.
PPMC also increased the value of its capital expenses from N6.4bn in 2012 to N125.9bn this year.
It argued that the “CAPEX increase is to enable rehabilitation of facilities.”
In spite of the budget document submitted, the National Assembly is still expecting the actual details of the revenues and expenditures from the NNPC.
The committee believes that the lump sum figures presented by the corporation did not explain how the money generated was being spent.
It also had issues with the extra expenditure over the total revenues collected, wondering where it got the additional money from.
The Chairman of the committee, Senator Magnus Abe, said NNPC should return to the committee with evidences of the sources of the funds for the excess expenditure.
The National Assembly is expected to commence consideration of the corporation’s budget this week.

January 22, 2013