July 12, 2018

Amidst NNPC’s recalcitrance



By Josef Omorotionmwan

IN some oil-producing nations, we have seen some equipment that enable the authorities sit at Headquarters and monitor the movement of the least drop of oil from the wells to the Point of Sale, POS. That’s the first step.

The second step takes you to the stage at which the authorities sit back at Headquarters and monitor the movement of the last cent from the POS into the nation’s purse.

We are assured that Nigeria will get there someday. That’s for the future. But for the now, the entire oil industry is clothed in as much confusion as confusion itself, if not more so. No aspect is spared – from head to toe.

Accurate book-keeping has remained on exile. We hear that at the production level, the production quota is what the multi-national oil companies say it is. After the determination of the pittance they have for us, then the journey to the POS begins. Enroute this great journey, there are a lot of huddles waiting to ambush the oil. For what eventually gets to the POS, the nation is simply at the mercy of vandals. Both at the high sea and on land, the vandals are on the first line charge before government and anyone else.

Whatever is left flows directly into the pocket of the Nigerian National Petroleum Corporation, NNPC, which decides, in its own wisdom, how much should be pinched into the Federation Account, so-called! We shall return to this aspect later.


How else should anything go with an organisation that has no defined leadership?

This friend of mine, a teacher, confessed how inadvertently he has helped to compound the problems of government and the people here. He consistently told the class that democracy feeds on the rule of the majority; and that while the minority could have its say, the majority must always have its way.

In practice, though, the majority is not always right. Neither does the majority always have its way as symbolised by the situation in the leadership of the Eighth National Assembly and the leadership, or lack of it, in Nigeria’s Petroleum Industry.

There was a promotion examination. One vital question was: who is Nigeria’s Minister of Petroleum Resources? All the 36 students in the class answered, Dr. Emmanuel Ibe Kachikwu. But between the teacher and the marking scheme before him, that was a wrong answer and he had a duty to do. He marked them wrong. So, 36 students had their say and the single teacher had his way. Where, then is democracy? And where is the majority rule? What a classic example of the minority rule that plagues every segment of the Nigerian Society. It is a society that is totally rudderless – no defined leadership pattern!

Why do we want to bleed the sacred cow, the oil industry, to death instead of protecting it? Why is the NNPC shrouded in such a huge transparency deficit?

While still searching for answers to who is the defacto and the dejure Minister of Petroleum Resources, we shall not forget the crises of confidence that recently erupted between the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu and the Group Managing Director, GMD, of the NNPC, Dr. Maikati Baru. The matter may have been temporarily glossed over and put to sleep, it remains at the very heart of the leadership question.

Baru claimed he could only deal with the Minister of Petroleum Resources, not the Minister of State; in utter defiance of the NNPC Act which provides otherwise and even when Kachikwu was the Acting Minister of Petroleum Resources for a greater part of 2017. What a bizarre rumble in the jungle! The big question is: WHO IS REALLY INCHARGE HERE?

While the NNPC is an organisation groping in the dark, the fact remains that a few people must be benefiting from its confused state. The NNPC remains an empty bag that cannot stand erect. Need we re-iterate that from inception, the NNPC has been a veritable source of slush funds for any government of the day and the hub of corruption?  How much progress can one expect from an organisation without a defined leadership? Herein lies NNPC’s dilemma.

Even at the basic level of what today’s politicians call stomach infrastructure, the NNPC would rather play the sadist by keeping the nation hungry through its late remittances to the public purse, thus pushing most States into the late payment of their staff salaries and allowances. This is where the month of June 2018 has been hard hit.

In the worst of times, when the price of crude oil nose-dived to its lowest ebb, there was an agreement between the State Governments and the NNPC that NNPC should remit the paltry sum of N112billion monthly to the Federation Account, which remittance should rise commensurately as the oil market improved.

The price of crude oil has improved substantially but the NNPC now wants to single-handedly determine how much it should throw into the offering bag. It must be the one to tax itself.

In June, the NNPC upped its remittance by N35billion, thus bringing the total remittance for the month to N147billion. The States are demanding for an additional remittance of N40bilion. That’s the cause of the face-off between the NNPC and the Federation Account Allocation Committee, FAAC, which made the meeting of the latter held on the penultimate Wednesday inconclusive.

The struggle continues. Meanwhile, NNPC would not open its books to FAAC to have a peep into the earnings, even when the latter pleads the Freedom of Information Act!

We have consistently advocated for a separate office of the Account- General of the Federation as distinct from the Accountant-General of the Federal Government. At no time has that need been more imperative than now! Like other federating units, the Federal Government is just one of the beneficiaries of the Federation Account; and nothing entitles it to be the sole determinant of what goes into the Account.