Hehehe..do you agree with him....The NNPC (Nigeria National Petroleum
Corporation) must die!” These were the words of the Governor of Kaduna
State, Mallam Nasir el-Rufai, in Abuja on Monday.
A visibly angry el-Rufai, while speaking
at the 7th Wole Soyinka Centre Media Lecture Series, lambasted the
national oil firm for being run like a parallel government, adding that
he was hopeful that the current administration of President Muhammadu
Buhari would “kill” the corporation.
The
governor called for the setting up of another national oil firm as he
argued that the present NNPC would kill Nigeria if it was allowed to
continue running.
“If you don’t kill the NNPC, it will kill Nigeria,” el-Rufai said.
According to him, the oil firm is
riddled with corruption and until it is destroyed completely and rebuilt
from the scratch, there will be no headway for Nigeria.
El-Rufai argued that with his experience
as a former Director-General of the Bureau of Public Enterprise, it was
possible to destroy a bad organisation and turn it into a good firm.
He maintained that Nigeria’s collective
wealth was being feasted upon by the less than 1,000 employees of the
corporation, alleging that the NNPC only remitted 42 per cent of what it
ought to remit to the Federal Government for about three years.
The governor used statistics to defend his recommendation on why the current NNPC must be destroyed
He said in 2014, the country produced on
the average about 2.2 million barrels of crude oil per day, while
importing most of its daily consumption of 43.5 million litres of
refined petroleum products.
He stated that the reliance on imports
of refined products led to unsustainable expenses on questionable
subsidy payments, exemplified by the $8.99bn spent in the 18 months
between January 2012 and June 2013.
El-Rufai said, “About N971bn was
budgeted for subsidy payments in 2014 alone (more than twice that was
eventually paid). You all recall how trillions of naira were paid out as
oil subsidy in 2011, when only N254bn was appropriated. No one has been
successfully prosecuted for this scam. Huge deficits in gas supply have
ensured that the country’s thermal plants cannot produce power at
optimal levels.
“In the eight years leading up to 2014,
joint venture production declined by 50.4 per cent. Some 100,000 barrels
per day, about five per cent of total production, is estimated to be
lost to organised theft. And we all dread the ease and rapidity with
which supply shortages lead to endless queues, widespread panic and
mortal consequences for the many victims of tanker accidents.
“The long and short of the situation of
our oil industry is best exemplified by the parallel government called
the NNPC. In 2012, it sold N2.77tn of ‘domestic’ crude oil but paid only
N1.66tn to the Federation Account. In 2013, it earned N2.66tn but paid
N1.56tn to FAAC; in 2014, (it earned) N2.64tn, but remitted N1.44tn;
while between January and May 2015, it earned N733.36bn and remitted
only N473.2bn.
“That means that the NNPC only remitted
about 58 per cent of the monies earned between 2012 and the first half
of 2015. A company with the audacity to retain 42 per cent of a
country’s money has become a veritable parallel republic!”
The governor noted that the NNPC felt
entitled to consume more resources than the 36 states and the Federal
Capital Territory, and the Federal Government combined.
“The example just given is only with
respect to domestic crude oil sale. Similar leakages exist in the NPDC,
NAPIMS procurement and subsidiary budgets,” he added.
On the way out for Nigeria, the governor
said the country could demonstrate a new purpose by slaying three huge
dragons, which he outlined as “a fixation with public ownership and
control of every major oil asset, the corruption and distortion that oil
subsidy is inflicting on our economy, and the NNPC in its current form
is not in our collective national interest.”
El-Rufai went on to state that the corruption and distortion in the subsidy regime must be tackled.
He argued that the oil subsidy regime
had neither grown the Nigerian people nor guaranteed stability of
refined products’ supplies.
Rather, he said, what the subsidy had
achieved was to create a huge hole in the budget and a new array of
overnight billionaires.
The governor said, “An efficient and
productive oil sector, able to create jobs, spur industrialisation and
earn more revenues, requires that we tackle the monster that the NNPC
has become. This country can no longer afford to maintain an NNPC that
arrogantly, unlawfully and unconstitutionally spends an unhealthy
proportion of national oil earnings on itself.
“We should replace the NNPC with brand
new organisations that are fit for purpose, among others, a
commercialised and corporatised national oil company, and new industry
regulators. This new national oil company should be capitalised once and
for all, and then freed to fend for itself like other national oil
companies do, seeking its financing independently from the financial
markets and paying due taxes and royalties.
He noted that no one was better
qualified to do this than the person that birthed the NNPC through the
merger of the NNOC and the Ministry of Petroleum in 1977, President
Buhari himself.
“No one can appreciate the gap between
the vision of the NNPC’s founding fathers, the beautiful baby of 1977
and the 38 year-old monster it has become better than President Buhari.
The NNPC of today must make Chief Sunday Awoniyi of blessed memory
squirm in his grave. Something fundamentally decisive must be done to
tame this monster,” el-Rufai added.
The governor noted that Nigeria had an
oil fortune, adding that the decline in the nation’s revenue or the
negligence in using it to build human capital or enduring physical
infrastructure was another matter.
El-Rufai stated that despite a 60 per
cent fall in oil prices between June 2014 and the end of last year,
Nigeria still earned $77bn from oil exports in 2014.
“The PUNCH Newspaper of April
2, 2015, quoting figures from the United States Department of Energy,
placed oil export earnings for the year 2011 at $99bn. Indeed, in the
five Jonathanian years, Nigeria earned nearly $500bn from crude oil and
gas sales,” he said.
According to him, about 40 per cent of
Nigerians are estimated to be very poor, adding that this means about 70
million citizens are living below the poverty line in a country that
has earned at least $1tn from oil in 50 years.
“Our rich enjoy the lifestyles of the
richest in the world, while our poor are truly the wretched of the
earth. This inequality is most unfortunate. That wide gulf in living
standards is clearly problematic.”
When contacted to speak on the points
raised by el-Rufai, the spokesperson of the NNPC, Mr. Ohi Alegbe, told
our correspondent that he was in a meeting.
A text message was sent to his mobile
telephone line demanding a response. However, as of the time of filing
this report, no response had come from the corporation.
One of the guests at the lecture series,
who is the Chairman, Editorial Board of The Nation newspaper, Sam
Omatseye, argued that caution must be applied when dismantling the
current NNPC.
He stated that the government must be careful not to create another national oil firm that would be worse than the current NNPC.
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