The Nation Newspaper

Tag: NNPC

  • NNPC repairs Arepo oil pipeline

    NNPC repairs Arepo oil pipeline

    The Nigerian National Petroleum Corporation (NNPC), said it had repaired the System 2B Pipeline, which was breached on July 21 at Arepo, in Ogun.

    This information is contained in a statement issued on Wednesday in Abuja and signed by the Group General Manager, Group Public Affairs Division NNPC, Mr Ohi Alegbe.

    NAN report stated that the NNPC engineers, who were deployed in the scene of the incident, were able to access the pipeline after the fire was put out and began repair immediately.

    “The vital System 2B Pipeline, which was breached at Arepo last week, has been fixed and brought back on stream.

    “Pumping of products through the system began on Monday upon the successful completion of repair.

    “Those engaged in vandalism should desist from the act in order to avoid the consequences.

    “Those engaged in the criminal acts of pipeline sabotage and oil theft should stop, so as to save themselves from the resultant horrendous deaths,” said the statement.

  • IPMAN supports unbundling of NNPC

    IPMAN supports unbundling of NNPC

    • Marketer back oil sector probe

    The Independent Petroleum Marketers Association of Nigeria (IPMAN) has thrown its weight behind plans by President Muhammadu Buhari to split the Nigerian National Petroleum Corporation (NNPC) into two.

    IPMAN saud it is in full support of attempt at probing the oil sector by the administration, adding that the probe should be extended to the NNPC depots in the country.

    The Western Zone Chairman, Alhaji Debo Ahmed, told reporters yesterday in Ilorin, the Kwara state capital, that  NNPC’s largeness  has made decision making to be extremely slow.

    “NNPC is an octopus. They have to split it to work effectively. The NNPC is doing everything both off-shore, on-shore, upstream and downstream and it is under only one person-the  Group Managing Director.  If NNPC is being managed by a private organization it won’t be like this; actually there will be public motive.

    “The bigness of this Corporation makes decision taking to become so slow and as such, if it is split into two, it will work more efficiently.  If the organization is split into two, it will be effective, efficient and they will respond to issues.”

    On probe of the oil sector, IPMAN boss said “President Muhammadu Buhari has made his marks in the oil sector in his first coming as Head of State.

    “We are in support of the probe of the oil sector and the probe should be extended to all the depots. We marketers pay N120,000 yearly for the renewal of our bulk purchasing and we have over 15,000 marketers nationwide, that is over N1.4 billion; Up till today they have not renewed the bulk purchases. What is bulk purchases just a paper for their legal department to sign.

    “They supposed to have used the money in making sure that the pipelines are okay because they are killing the goose that lay the golden egg, we are paying money to give us a license. We don’t see the effect of this because our licenses will be lifting products in the depots. Are the depots working now?

    “The probe should not be limited to the headquarters alone, it should extend to the depots; from the depots the public will be able to know what the NNPC has been doing.”

    Speaking on deregulation, the IPMAN chair added that “deregulation is good for the market to be competitive; but can Nigerians go on this deregulation?

    “Not that subsidy is too bad but the management. Subsidy started in 1974 during General Yakubu Gowon’s administration when there was scarcity of products in parts of the country.

    “In 1975 the administration also established Petroleum Equalisation Funds (PEF) to manage that subsidy, as at that time we were not importing much. PEF was managing the price differentials. By that time PEF was autonomous, but when NNPC took over that is when PEF started having problems.

    “Nobody was crying of any subsidy. It was when NNP started having problems with the refineries and it was going for importation, that subsidy came up. They pay almost four types of subsidy on a product. The cumulative of this makes the price of product exorbitant and as such government is paying so much to maintain the price of a product to the public.

    “If government wants to remove the subsidy it should look at the management of subsidy or the product availability? You cannot deregulate under importation; you are going back to square one; If the government is actually refining products nobody will hear about subsidy.

    “Deregulation is good, but the infrastructure must be there; the products also must be sourced from our refineries so that the cost of the deregulation will not be too much for the common man to buy petrol.”

  • NNPC probe ‘ll bring transparency, says Peterside

    NNPC probe ‘ll bring transparency, says Peterside

    Former Chairman of the House of Representatives Committee on Petroleum (Downstream) and governorship candidate of the All Progressives Congress (APC) in Rivers State Dr Peterside Dakuku has said the probe of the Nigeria National Petroleum Corporation (NNPC) will promote transparency and good governance.

    Peterside, who spoke to reporters in Benin City at the weekend, said probity was a continuous process in governance.

    He noted that there would be no attraction for transparency and probity if people were not made to face some consequences.

    Peterside called for police reforms because the use of any alternative to provide security would be a disaster.

    He said:  “The Police did their best of to provide us security during our campaigns. There are areas where they failed too, even areas where they were accessories to crimes and some of the things that happened.”

    “What is the alternative to police protection which is self help. That self help means patronising criminals. I will never patronise criminals. We will continue to patronise the police. We will rather ask for reforms. They should restrategise and be provided better equipment because the alternative is disaster for us.”

  • Five irrefutable reasons against the privatization of the NNPC: an open letter to the Presidents of NLC and PENGASSAN

    Five irrefutable reasons against the privatization of the NNPC: an open letter to the Presidents of NLC and PENGASSAN

    Comrades and compatriots, greetings!

    Last week in this column, I addressed an open letter to the Governor of Kaduna State, H.E. Nasir Ahmad El-Rufai in which I took him up on his recent, widely reported call on President Buhari to privatize the Nigerian National Petroleum Corporation (NNPC). I am addressing this letter to you, not because Governor El-Rufai has not responded to my open letter, but because I believe that you, as representatives of workers in the oil industry in particular and Nigerian workers in all sectors of the economy in general, ought to wade in on this all important debate on the proposed privatization of the NNPC. This reason for this is, I think, fairly obvious; at any rate, it shall become even more obvious in the course of my elaboration of the essential points of this open letter to you. But for now, permit me to simply say that your silence on this matter will speak volumes. I am of course aware that the General Secretary of PENGASSAN (The Petroleum and Natural Gas Senior Staff Association of Nigeria) has already commented on El-Rufai’s devastating critique of the scale of corruption in NNPC. However, that response from the PENGASSAN General Secretary should, in my opinion, be regarded as only a first response in that it was far too defensive and it did not address the issue of the privatization of the national oil corporation. With these initial comments out of the way, permit me to now go directly to the FIVE weighty reasons against the privatization of NNPC.

    One

    NNPC is not The Daily Times, Transcorp or NEPA; it is NNPC

    Privatization of state-owned or public enterprises is not new in Nigeria. As a matter of fact, to the extent that there was any consistent ideological core in reign of the PDP in its sixteen years in power, it is the wholesale privatization of state-owned enterprises and utilities. Other than this, the erstwhile ruling party in particular and all ruling class parties in our country have no defining ideological and policy identities. This is why disputes, which are often extremely bitter and fractious between and within our political parties, are hardly ever about ideology, principle, or policy; they are nearly always about power sharing and the struggle for high and lucrative political offices. But with regard to the relentless and wholesale privatization of public enterprises, this is the bible of the PDP in particular and all our ruling class parties in general.

    However, while enterprises and utilities in all areas of the national economy have one by one fallen to the relentless axe of privatization, a line had hitherto been drawn around NNPC. That line is about to be erased, that is if El-Rufai and those who think like him in the APC have their way. NNPC is like no other enterprise or utility in our country in that, in a manner of speaking, it is the mother and father of all enterprises, public and private. This observation on the uniqueness of NNPC can be put in a quite simple language: the overwhelming bulk of the finances on which all the federal, state and local administrations in the country depend are handled at source by NNPC. But there is also a technical jargon for this uniqueness of our national oil corporation and it is this: Nigeria is, overwhelmingly a rentier state and NNPC is the single agency on which the rents that make the existence and viability of this sort of state possible at all depend. In other words, if Nigeria was not a rentier state, and if oil revenues constituted only an insignificant fraction of its operating finances, then NNPC would be like The Daily Times, NEPA, Transcorp or the moribund Nigerian Airways. But at least for the present period in the economic history of this country, NNPC is the lifeline on which the overwhelming bulk of the economic activities in both the private and public sectors depend.

    Comrades, the implications of this uniqueness, this singularity of NNPC for any plan to privatize it are fairly obvious and for this reason it cannot and should not be done without a full, widespread and nationwide debate has taken place. Indeed, if it does appear that the new ruling party is hell bent on this plan – and that is far from being clear or obvious at this point in time – nothing short of a referendum will be required. Your voices and the voices of the members of your unions should be loudest and clearest in the call for such a referendum – if El Rufai carries the President and the new ruling party with him on this crucial matter.

    Two

    Corruption and mediocre performance are afflictions of both private and public enterprises in Nigeria

    This factor is pretty unassailable. In many of the full blown capitalist countries of the world, the fundamental rationale for privatizing public enterprises has been the claim, the assertion that privately owned and run enterprises perform much better than state-owned or public enterprises. As the saying goes, the business of government is not business but governing. This claim is not, by the way, true or verifiable in all sectors of the national economies of the world. All the same, this claim has never been credibly or loudly made in our country, the simple reason for this being the fact that it would be quite laughable to make such a claim in Nigeria. When Daily Times was privatized, it became even worse than it had been before privatization. PHCN has performed more or less on the same level of satisfaction of consumers as the old ECN. Transcorp, the biggest multinational corporation ever started in our country, has been the laughing stock of multinational corporations all over the world; no sooner was it incorporated than it immediately began to flounder.

    The reason why both large scale private and public enterprises in our country are equally prone to corruption and poor performance is to be found in the fact that the wealthiest Nigerians make their wealth, not through profit-generating businesses but through primitive accumulation built on the appropriation or theft of public funds to “buy” state-owned enterprises that are then badly managed precisely because they were “bought” for nothing. There is absolutely no reason in the world to think or to hope that a privatized NNPC will depart from this historic norm of the Nigerian political economy under the rule of the PDP and before then the military autocrats.

    Three

    “Inland revenue” is different from “offshore revenue”; privatization of tax collection should not be a prequel to privatization of collection of rents from foreign-owned oil conglomerates.

    The privatization of tax collection and toll gate fees in Lagos State marked a decisive step in the privatization of state agencies and their money-generating functions in Nigeria. The connection between this and the call for the privatization of the NNPC has not yet been made, but we can be sure that it will in due course be made. The argument could or will be made that if the privatization of collection of taxes and toll gate fees was not only possible but seems apparently “successful”, why shouldn’t the same thing be successful if and when applied to the collection of revenues from the offshore activities of the big conglomerates in control of the extraction and exportation of crude oil from our country.

    This is a completely superficial and also false argument as there is little or no analogy that can be made between the two. Extractive industries constitute some of the biggest transnational economic enterprises of the world and of the modern economies of the planet in general. For this reason, comparing the simple collection of taxes and toll gate fees that require little or no investments, skills and a grasp of the finer and more arcane points of economic relations between the nations and regions of the planet to the work of NNPC is like comparing the activities of a street hawker or vendor in Lagos to the operations of the Dangote financial empire. Comrades and compatriots, please let us be ready for them if and when they make this analogy in justification of the drive to sell off the national oil corporation.

    Four

    The privatization of NNPC will set off ethnic and regional rivalries that will be nothing short of a civil war in the inner processes of the economic lifeline of the country.

    It is very naïve, or on the other hand, foolish and dangerous in the extreme to think that selling off NNPC will not raise bitter, divisive and nation-wrecking struggles over which zones, which “tribes” and which communities of “religionists” will get what percentage or share of the broken and parceled-out national oil corporation. The perennial controversies over the “principle of derivation” and “resource control” will resurface. In fact already, there are whispers and rumors that the privatization of NNPC is intended to once and for all “solve” the endless strife over “resource control”. The privatization of NNPC will not achieve this goal; as a matter of fact, it will exacerbate and raise to a new level the divisive struggles over the sharing of oil revenues between the different parts of the country.

    Five

    Recover the loot; end the corruption in private and public businesses; reorganize NNPC

    Comrades, I cannot end this open letter to you without relating all that I have written herein to the untold suffering and hardship that the monumental corruption in NNPC has caused and continues to cause to the overwhelming majority of our peoples throughout the length and the breadth of the country. This is the bottom line: the colossal dispossession of the Nigerian nation and peoples through corruption and abysmally poor performance of both governmental and non-governmental enterprises in our country.

    The new government and ruling party should be given a chance to get to grips with the gargantuan tasks that this entails. Already, Nigerians at home and abroad are getting jittery over the slow pace and poor starting actions of the new ruling party. Your voices and the voices of all patriotic organizations and individuals should rise now to ask the government to recover the hundreds of billions of dollars stolen from NNPC and other government coffers and give clear signs NOW that it will end the mind-boggling corruption that is ruining the country and the lives of our peoples. If there will be a nationwide debate and/or referendum on the privatization of NNPC, this should be the precondition for those national soul-searching processes. At this stage of our economic (mal)development, the essential thing is not private versus public businesses; it is regulated versus unregulated and unregulatable corruption and mediocrity in both the public and private sectors.

    Biodun Jeyifo

    bjeyifo@fas.harvard.edu

  • Kill NNPC or corruption?

    On Monday, July 13, at two separate events, two elected prominent, influential and powerful public officers, one a governor, the other a national legislator, made similar policy advocacy on fundamental aspects of the economy, which could determine the direction of civil society-government relationship in the coming period. They are the Governor of Kaduna State, Nasir El-Rufai and the Speaker of the House of Representatives, Hon. Yakubu Dogara.

    Riding on the wave of anti-corruption concerns, El-Rufai, in his lecture at a Wole Soyinka Centre event, advocated the scrapping of the Nigerian National Petroleum Corporation (NNPC), arguing that “if you don’t kill NNPC, it will kill Nigeria”. He justified his call by making reference to the undeniably monumental corruption in the NNPC. He revealed 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!” This means that, as he rightly pointed out, the NNPC alone retaind more money than what the Federal Government, the Federal Capital Territory and the state governments put together shared from the revenue accruing to the NNPC.

    However, it is important to understand the ultimate goal of Governor El-Rufai, from the standpoint of implications for national development. His concerns appear not to be limited to tackling corruption. It appears he has, in fact, given up hope that corruption can ever be fought successfully in Nigeria. Rather than insisting that the Federal Government under President Buhari should set in motion the process of bringing to justice all former top administrators, ministers and directors who had played a role in looting NNPC, El Rufai merely lamented that “No one has been successfully prosecuted for this scam”. Rather than distinguishing the role of all past top looting-managers of the NNPC (such as ministers) from the role of ordinary workers, the governor put the burden of corruption in the NNPC on the entire workforce of “less than 1,000 employees of the corporation” who as he put it, are “feasting” on the collective wealth.

    The ultimate goal of El Rufai tends to be the privatization of NNPC and removal of fuel subsidy. According to El Rufai, “the country should demonstrate a new purpose by slaying three huge dragons” which he identified as “fixation with public ownership”, “oil subsidy” and the NNPC. He was reported to have argued, that “oil subsidy regime had neither grown the Nigerian people nor guaranteed stability of refined products’ supplies”.

    If the call by El Rufai that the NNPC should be “killed” because of its intractable corruption should be followed to a logical conclusion, it amounts to saying that because corruption permeates all levels of government, from the federal to the local governments, including the legislature, then, all the tiers of government should be “killed”. That would ultimately mean that there would be no office called the office of the Governor of Kaduna State, which El Rufai occupies today. This analogy reflects the depth, or lack of any depth, in the call by El Rufai for the abolition of NNPC on the account of pervasive corruption.

    El Rufai is however not alone in the recent advocacy for removal of fuel subsidy. Apart from the promptings by spokespersons of world imperialism, the US Government, the APC Transition Committee, the Speaker of the House of Representatives, Hon. Yakubu Dogara, has added his voice in support of the pro-subsidy removal advocates. Speaker Dogara, has been busy researching and advising on “the most legal way to do it so that subsidy can go permanently”. Hon. Dogara’s concerns are not about how to bring relief to the masses of our country but about how the “stomach infrastructure” of dealers in the oil industry can be strengthened through fuel subsidy removal. On the same Monday, July 13, when Governor El-Rufai made his call for the abolition of the NNPC, slaying fixation with public ownership and removal of subsidy, Hon. Dogara was equally advising a delegation of the Independent Petroleum Marketers Association of Nigeria (IPMAN) to mount pressure on the executive arm to inaugurate the price control board under the Price Control Act, which could, in exercise of its powers, remove petroleum products from the list of items whose pricing is subject to regulation. Alternatively, the IPMAN, according to Dogara’s advice, could pressurize the National Assembly to either repeal or amend the Price Control Act by removing petroleum products from the list of items whose pricing is subject to regulatory control. The IPMAN delegation had sought the support of the Speaker for the “approval of government to engage in the swapping of crude oil for refined products” under a pricing regime in which petroleum products are not subject to regulated pricing.

    President Buhari appears, for now, to be consistently alone, even within his own political party, the APC, in resisting removal of fuel subsidy. According to the Reuters, as posted by Uhuru Times, the Presidency has declared that Nigeria will stick with fuel subsidies for now as “President Buhari says investigating corruption is a bigger priority than scrapping price caps on domestic fuel”. The President is reported to have explained that:

    “I have received …literature on the need to remove subsidies, but much of it has no depth. … Poor security, sabotage, vandalism, corruption and mismanagement – not necessarily subsidies – are the most serious problems of Nigeria’s oil sector.”

    The critical concern is for how long would President Buhari be able to resist the powerful pro-subsidy removal forces in the APC?

    President Buhari has good reasons to continue to resist fuel subsidy removal. Apart from the understanding already displayed in President Buhari’s statement quoted above, “killing” NNPC will have implications for job losses which will compound the unemployment situation and associated criminalities in social relations. The fundamental raison d’etre for the existence of social institution called government is not only for providing physical security but also economic security. Removing fuel subsidy, privatizing NNPC, and so on, will exacerbate the already harsh socio-economic conditions of the most vulnerable classes rather than attenuate their material well-being.

    The unfolding trends of policy advocacy on the management of the petroleum industry, including pricing policy on petroleum products, have shown clearly that two dominant forces are in contention within the ruling APC. One trend is for discarding public ownership, price control and fuel subsidy removal. The other is for retention of some level of public ownership and exercise of governmental control on pricing and retention of fuel subsidy regime. The trend that finally prevails within the APC-controlled executive arm and the National Assembly will determine whether the Buhari administration (and by extension, the entire APC) will go down in history as a pro-people ‘change’ government or a continuation of governance by declaration of war against the interests of the downtrodden.

    Let President Buhari be consistently clear about it: no government, even the most brutal military dictatorship, has ever succeeded in muscling and silencing the Nigerian working people in the face of crippling economic policies, particularly, increases in the prices of petroleum products. Just as there is a direct relationship between removal of fuel subsidy and increases in the prices of all other goods and services, there is a relationship between the degree and momentum of popular resistance struggles and increases in the prices of petroleum products. In what appears to be inevitable impending social conflicts around the issue of fuel subsidy removal, President Buhari should lean on the outcries of the masses against the pressures of business and contractor dealers in and out of government circles.

     

    • Aborisade Esq; writes from Lagos

     

  • NNPC bans 113 tankers from lifting oil

    NNPC bans 113 tankers from lifting oil

    The Nigeria National Petroleum Corporation (NNPC) has banned 113 oil tankers from lifting crude oil due to sharp practices.

    The tankers, according to a document signed by Gbenga Komolafe, group general manager, Crude Oil Marketing Division, NNPC, were banned from entering  oil facilities and territorial waters.

    The document obtained from Platts, a global energy trading information source, said: “The NNPC has prohibited 113 tankers from engaging in crude oil/gas loading activities in any of the terminals within the Nigerian territorial waters until further notice.”

    The letter, Platts report showed, was dated July 15, and addressed to terminal operators in Nigeria, while the tankers were listed in an attached spreadsheet.

    NNPC said: “The affected vessels have also been barred from movements within the Nigerian territorial waters forthwith.

    “Finally, enforcement of the above directives takes immediate effect pending a notice to the contrary by Government, please.”

  • NNPC begins repairs of Kaduna refinery’s pipelines

    The Nigerian National Petroleum Corporation (NNPC) has started rehabilitation on the pipelines that supply crude oil to the Kaduna Refinery and Petrochemical Company.

    The repairs, a source told The Nation at the weekend, started early this year, adding that the oil giant did not want to make noise about it to avoid another vandalism of the asset.

    The pipeline was vandalised in 2010 and couldn’t be repaired because of continual attacks by vandals stalling crude supply to the refinery, a source at the NNPC said. Although the source didn’t want to disclose the cost of the repairs, he noted that the project is expected to be completed very soon so that productions from the three refineries in the country will meet substantial percentage of the national fuel needs.

    He said the Corporation’s plan is to bring all the refineries on stream before end of this month, having completed their rehabilitation but the challenge it has is how to supply crude to Kaduna.

    He said: “The problem we have is the Kaduna refinery. The pipeline to the refinery that is bad especially from Abaji to Kaduna. That axis has become vandals’ haven and if we go out there to say we are repairing it, the vandals will be on the flank to strike again. “So we are not making noise about the project.”

    The Kaduna Refinery with 110,000 barrel per day (bpd) nameplate had been regularly starved of petroleum due to frequent attack on various points of the pipeline and as soon as the pipeline is repaired, the vandals will strike again. Sometimes, the vandals attack the Chanomi creek pipeline or the System 2C, which links Chevron’s Escravos pipeline system to Warri South-West Local Government Area of Delta State to Warri Refining and Petrochemical Company and also Kaduna Refining and Petrochemical Company.

    The vandals attack these axis often and this stalls supply to Kaduna. The System 2C was attacked in August 2013 and the cost of the repair was estimated at N200 million.

    The spokesman of NNPC, Ohi Alegbe, last month lamented that Nigeria’s three refineries would resume production this month as phased maintenance of the refineries was nearing completion.

    Alegbe said the two refineries in Port Harcourt are scheduled to begin to receive crude next week while those in Warri and Kaduna would follow shortly after. The maintenance programme, according to him started in November 2014, and is being carried out by NNPC’s in-house engineers.

    “We had to resort to in-house engineers after the original builders of the refineries, who were called in to do the job, kept coming up with outrageous bills. We have installed mini power plant to solve the power problem,” he said. Bayelsa set to create eco-industrial hub for economic expansion.

  • NNPC is not a parallel government; it is the heart and soul of the government: an open letter to Nasir Ahmad El-Rufai

    NNPC is not a parallel government; it is the heart and soul of the government: an open letter to Nasir Ahmad El-Rufai

    Dear Governor El-Rufai:

    Greetings! Your talk as the distinguished guest lecturer at the 7th Wole Soyinka Center Media Lecture Series in Abuja this past Monday has sent shock waves round the country and the Nigerian diaspora. “Kill NNPC!” you titled your lecture, adding at the climactic moment of the lecture that it is either Nigeria kills NNPC now or NNPC will eventually kill Nigeria. Although the figures that you gave in your lecture as an indication of the stupefying level of graft and corruption in NNPC are not new at all, they are worth repeating, quoting your own words directly:

    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!”

    On any count, these are indeed staggering figures and this column, as well as many other columns of the Nigerian “commentariat” have written extensively on the same figures with anger, alarm and desperation and in a few cases, despair. For this reason, this open letter to you is not about the scale of the seriousness of the matter. Rather, my concern with the analysis and prognosis in your lecture pertains to two issues. The first of these is what, for want of better words, I can only describe as the dominant role of half-truths in your lecture, this being constructed around your claim that NNPC is a parallel republic or government, when in fact, NNPC is the very heart and soul of the government.

    The second of my two main issues in this letter is the call in your lecture for the privatization of the NNPC. Whether by accident or design, this call was not made explicit in your lecture, but it was nonetheless palpable enough that any attentive reader of the published text of your lecture could not have missed it.

    Before coming to brief discussions of each of these two issues, let me remark that, as reported and published in its entirety, your lecture was eloquent not only in language, but also in ideas, especially ideas crucial to the political and economic survival of our country with special regard to the dire poverty and insecurity that the vast majority of our peoples have to endure on account of the scale of the looting of our national wealth in the NNPC. My one big difference with you on this particular point is the figure of 70 million or 40% of our population for those living in extreme poverty. I don’t know from where you got this figure. Perhaps you’re quoting the figures given by the Jonathan administration and the PDP during the recent electioneering campaigns? They claimed they had reduced the absolute poverty rate down to 40% from 70% in four years, based on an additional claim that they had created millions of jobs. But everyone not in the PDP knew that these were cynically bogus figures. The wonder then is how and why you of all people should be repeating these same figures. But this is a minor point; I must now move to my main issues in this letter, issues of life and death for our country and its peoples, especially the dozens of millions of unemployed young people. As I have said earlier in this piece, the first and main issue is your claim that NNPC is a parallel government that Nigeria must destroy before it destroys Nigeria.

    Dear Governor El-Rufai, how in the world can you describe NNPC as a parallel republic or government when practically everyone in the country knows that the corruption and looting in the NNPC was directly linked to the presidency and the federal government itself? Are you pretending not know that corruption on that scale could never, never take place – in Nigeria or any other country in the world – if it was not linked, body and soul, to the government, the powers that be? Are you feigning ignorance of the fact that the Ministry of Finance and through that ministry, the Federal Government, has effective supervisory control over the NNPC? For a man of your intellect, one of the things that I found absolutely unbelievable in your lecture was the claim that, quoting your own words, “hundreds of employees of NNPC feed fat on Nigeria’s resources”? Haba, Governor! The upper managerial staff of the NNPC may be the highest remunerated workers in Nigeria, but are they the ones sharing the billions of dollars that were not remitted into our national public coffers? Are the employees of the NNPC the people that made away with the 2.53 trillion naira stolen in the 2011 oil subsidy mega scam? Wasn’t that scam a huge chunk of the monies expended by Goodluck Jonathan as the war chest for his 2011 presidential campaign? Aye you unaware of the fact that a Committee of the Senate probed that mega scam and when it published its reports and gave the names of people involved in the scam, not one of them was an employee of NNPC?

    I have posed these preceding questions rhetorically because I am sure that you know that the answer to each and everyone of the questions is a resounding no. Because I strongly believe that you do know that NNPC is not a parallel government but is a part of the government, I have pondered on why you chose to mischaracterize the parastatal as indeed a parallel government. My “generous” reading of your motivation is that since you know that NNPC is the biggest single source of uncontrollable, unregulated corruption and looting in the government, perhaps describing it as a parallel government might enhance the possibility of once and for all tackling and ending this biggest, gargantuan source of corruption in our country. On this account, if we can effectively end corruption in NNPC, all the other sites and locations of corruption in government can then be also engaged, based on the lessons learnt from the containment of the NNPC mega crisis.

    That is my “generous” reading of your probable motivations. However, I must confess that I do have an admittedly less “generous” reading that, in my opinion may be nearer the mark. This is none other than my suspicion that your true motivation is the privatization of NNPC, the single biggest and most critical parastatal in our country. You are now a member of the ruling party, one of its thinkers in fact, and you wish to accomplish now what you couldn’t when you were in the PDP and, as Director General of the Bureau of Public Enterprises, supervised the privatization of dozens of state owned enterprises and utilities. As a matter of fact, towards the tail end of your lecture, you openly stated this demand for the privatization of the NNPC, although you took care not to directly mention the word “privatization”.

    The privatization of the NNPC would constitute a big, momentous date in the economic history of our country. For this reason, it cannot, and should not be done without a thoroughgoing, public and nationwide review of what this would mean, especially in the light of the results of privatization in Nigeria in the last few decades, with special relevance to what transpired under your watch as the Director General of the Bureau of Public Enterprises. What have been the net results of the privatization carried out under your headship of that Bureau, Governor?

    Here I must confess that I used to be a total opponent of privatization of public enterprises in our country and still retain some of that intransigent opposition. However, I am realistic enough to acknowledge the fact that in Nigeria as in many other parts of Africa and the developing world, the ideological and pragmatic winds of economic development have swung decisively against nationalization in favor of privatization. But what has not has not changed, what indeed cannot be changed is the fact that whether public or private, enterprises must enhance the economic survival and consumer needs of the population.

    Dear Governor El-Rufai, please be explicit, unambiguous and honest about your real intensions and maybe the intensions of the APC of which you are a major intellectual and political figure: Are you floating a kite, the kite of the privatization of the NNPC? If so, please give a full report of the economic and social impact of the massive privatizations that took place under your tenure as Director General of the Bureau of Public Enterprises. You do know, don’t you, that at least on the anecdotal level, privatized public enterprises have not functioned better than they had done before they were privatized? The transformation of the old ECN into PHCN is a case in point. The experience of GSM users is another telling example: there is hardly any country in Africa and the world where consumers of the services of the GSM corporations suffer more at the hand of the monopolies than in Nigeria. More generally, Nigerian capitalism is largely unregulated or perhaps even unregulatable and the Nigerian consumer is completely at the mercy of the free and uncontrollable abuse of virtually all enterprises, public and private.

    The underlying cause of all of this is of course the unregulated and unregulatable nature of governance itself. As I have repeated many, many times in this column, the former Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, told The Economist in 2011 that corruption and waste in the Nigerian governmentwere so vast that she would feel satisfied if by the end of her tenure she had reduced the scope by a mere 4%. It would be a great act of opportunism to sell off NNPC without first significantly raising the bar of regulatory control of corrupt practices in government, in public enterprises and private businesses far above this Okonjo-Iweala benchmark of 4%. So far, Governor El-Rufai, you and other spokespersons for the APC have inundated the media with news of the unspeakable levels of corruption that you have discovered in the NNPC and other parts of governmental and parastatal institutions. Before selling off the NNPC, could you at least tell us what you are doing to (a) recover the stolen loot and (b) how you are going to substantially reduce the corruption, the looting, the waste?

    Biodun Jeyifobjeyifo@fas.harvard.edu

  • NNPC under fire over $1.2b transfer

    NNPC under fire over $1.2b transfer

    Oil giant Nigerian National Petroleum Corporation (NNPC) is in the news again – over its bid  to transfer $1.2 billion from commercial banks to the Central Bank of Nigeria (CBN).

    The NNPC’s action is “panicky”, the All Progressives Congress (APC) said yesterday, alleging that it was all to cover up alleged sharp practices by the corporation.

    The APC alleged that revenues belonging to the federation were fraudulently deposited in local banks to yield huge interests for the officials, who the party did not name.

    It renewed its call on President Muhammadu Buhari to probe the whereabouts of the tax paid to the Federal Inland Revenue Service (FIRS) and dividends paid to the NNPC by the Nigerian Liquified natural Gas (NLNG) Ltd.

    In a statement by its National spokesman, Alhaji Lai Mohammed, the APC said the Federal Government should probe the whereabouts of the dividends paid to the NNPC by the NLNG, as well as the taxes paid to the FIRS Federation Account prior to the latest payment in June 2015.

    Mohammed said the call had become more urgent against the backdrop of published reports that the NNPC withdrew $1.2 billion from banks so it could place the money with the CBN.

    He described the move by the NNPC as a panic reaction to the expose by APC that over $4 billion dollars was missing in past dividends paid to the NNPC by the NLNG.

    The statement reads: ‘’Whereas NLNG’s dividends are paid to NNPC’s account with JP Morgan, from where they are supposed to be paid into the Federation Account, in accordance with the law, some unscrupulous officials of the corporation have apparently been moving such funds to local banks so they can collect huge commissions on them.

    ‘’Now that the cat has been let out of the bag, they have started moving the funds from the banks to the CBN. We believe what we are seeing now is just a tip of the iceberg, hence the need for the authorities to call the NNPC officials to give account of the paid NLNG dividends to date.’’

    “Any delay in calling the officials to account for the dividends may give them enough time to cover their tracks, said the party, in addition to the dangers posed to the banks – and by extension the economy – by the sudden withdrawal of such a huge fund from the NNPC’s accounts with them.

    ‘’The top officials of the NNPC and others who met on Monday and decided to withdraw the $1.2 billion from the corporation’s account to the CBN must be asked a number of questions, including their motive for the decision and the whereabouts of the commissions paid on such funds.”

    The APC’s spokesman said that notwithstanding the attempt to pull the wool over the eyes of Nigerians, the Federal Government must remain undaunted in unravelling what happened to the dividends as well as previous taxes paid by the NLNG, as part of ongoing efforts to plug all financial leakages, ensure the payment into the Federation Account of all funds and stop the looting of the treasury.

    He said: ‘’It is not by accident that until the advent of the Buhari Administration that has decided to enthrone transparency in governance, no one has heard anything about NLNG dividends and taxes, while the funds therefrom have not been shared as they should have been. This is not right.

    ‘’A situation in which funds meant for all Nigerians are eaten up by a few will no longer be tolerated. Those who are opposed to the efforts by the Buhari Administration to clear the rot left behind by the past government and restore transparency to the system are enemies of Nigeria.’’

  • NNPC has outlived its usefulness, says el-Rufai

    NNPC has outlived its usefulness, says el-Rufai

    •Omatseye urges end to impunity

    Kaduna State Governor, Mallam Nasir el-Rufai has urged President Muhammadu Buhari to set a machinery in motion aimed at unbundling the Nigerian National Petroleum Corporation (NNPC).

    Speaking yesterday in Abuja at the 7th Wole Soyinka Centre Media Lecture Series under the theme,  ‘Nigeria and the Oil Misfortune,’  El-Rufai lamented that while the country earned nearly $1trillion from crude oil and gas sales over the past 50 years, the fact that about 70 million Nigerians still live below the poverty line is an indication that the so-called oil fortune is not for the masses.

    While el-Rufai insisted that “NNPC must die” because of its recklessness in the oil sector, the Chairman of Vintage Press’ Editorial Board, Sam Omatseye, sought renewed commitment to the rule of law as a strategy towards curbing impunity and corruption in the oil sector.

    General Manager (Policy, Government and Public Affairs),  in Chevron, Deji Haastrup, who also spoke at the occasion, said International  Oil Companies (IOCs) operating in the country, appreciate the need for greater transparency in the oil sector, while the former Executive Secretary, Petroleum Equalisation Fund (PEF), Mrs. Adefunke Kasali, lamented that “the oil sector has suffered from gross mismanagement over the years.”

    At the event, the Executive Secretary of Nigeria Extractive Industries Transparency Initiative (NEITI), Hajia Zainab Ahmed, said huge resources from oil and gas, minning and even funds meant for the development of natural resources have been frittered without any sense of accountability, even as some states generate less than five per cent of their needs.

    In his keynote address, el Rufai said fuel subsidy must be scrapped so that its N1 trillion annual budget could be released for capital development, adding that the NNPC has become a parallel government that must be scrapped before its undue appropriation of oil proceeds kill the nation.

    He said: “For our vast masses, oil is no fortune; it is more of a mirage, but a more insidious kind, because the fortune is visible in the lifestyles of a few thousands of the privileged elite but is stubbornly inaccessible to tens of millions of ordinary people.

    “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.”

    He said there is no justification for entities that pay taxes to turn around altogether and unilaterally withhold trillions of naira, or seek multi-billion dollar federal budget annually to the detriment of the overall good of  the nation.

    “Reliance on imports of refined products has seen unsustainable expenses on questionable subsidy payments, exemplified by $8.99 billion in the 18 months between January 2012 and June 2013, adding that  “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 N2.77 trillion of ‘domestic’ crude oil, but paid only N1.66 trillion to the Federation Account.

    As el-Rufai put it: “In 2013, it earned N2.66 trillion, but paid N1.56 trillion to FAAC, in 2014 N2.64 trillion but remitted N1.44 trillion, while between January and May 2015, it earned N733.36 billion and remitted only N473.2 billion!

    “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!

    He said NNPC feels entitled to consume more resources than  the 36 states, the FCT (Federal Capital Territory) and the Federal Government combined, stating that the example just given is only with respect to domestic crude oil sales.

    He said similar leakages exist in NPDC, NAPIMS procurement and subsidiary budgets.

    Calling for proper governance, efficiency and security of Nigeria’s oil industry in view of the fact that a barrel of crude oil is projected to remain low at between $40 and $60 per barrel for a long time, he urged a mix of fresh strategic thinking and a firm commitment to reform. He said the country must address a fixation with public ownership and control of every major oil asset; corruption and distortion that oil subsidy is inflicting on the economy, and; NNPC whose existence is no longer in the national interest.

    The governor said: “We need to define exactly what we want the oil industry to be and to achieve, and then define the structure that can best deliver it; 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.

    “The corruption and nonchalance that have hobbled the NNPC are symptoms that its best days are over. We should give it a deserved funeral so that a new institution, active and nimble, can promptly replace it; NNPC’s subsidiaries and associated companies can be reviewed, restructured and privatised or commercialised as appropriate consistent with national interest and objectives.

    “No one is better qualified to do this than the person that birthed the NNPC through the merger of the NNOC (Nigeria National Oil Company) and the Ministry of Petroleum in 1977 – President Buhari himself.