September 15, (THEWILL) – In the face of the challenges in the oil sector, particularly the current tightness in the supply of petrol, it has become fashionable to blame the national oil company, the Nigerian National Petroleum Company Ltd (NNPCL) for everything. Last week, it was Prof Pat Utomi who railed and fumed at NNPCL, calling it one of the most opaque and unreliable companies in the world. Before then, The Punch had published an editorial in which it described the NNPCL as a danger to Nigeria.
The latest of these vitriolic attacks is by Dr Muiz Banire, a Senior Advocate of Nigeria (SAN) and former Commissioner of Transport and Environment in Lagos State, who contended in his column in The Sun that NNPCL is the black hole of Nigeria. Considering all that is going on in the petroleum sector, it would appear justifiable to call out the NNPCL as some people have been doing in recent times. But most of the diatribes have been based on sentiments that are not rooted in facts. Railing at the NNPC Ltd without a thorough understanding of the issues that threw up the current challenges in the oil sector, as most commentators have been doing, will yield no good for the country.
At this critical intersection, the task for all well-meaning Nigerians should be how to find lasting solutions to the mischievousness in the oil sector and not to look for scapegoats, as Dr Banire has done. According to Banire, Nigeria has been experiencing fuel scarcity since 1973 on the back of fuel subsidy and the NNPCL is responsible for it. The assertion that the NNPCL is responsible for this state of affairs is moot. The policy of fuel subsidy is not the preserve of the NNPCL. Various administrations over the years have thought it wise to subsidise the cost of petroleum products for citizens.
They came up with different methods of doing that. The role of NNPCL has been to implement the policy as decided by the Federal Government. At a point, when government felt that the fuel subsidy policy had become a burden that should be done away with, they made it known to the people. NNPCL, as the national oil company, implemented it. This was the case in 2014 when the nation went up in protest against the decision to remove fuel subsidy. The same scenario repeated itself in 2019 when the then Muhammadu Buhari administration came up with the policy to remove fuel subsidy.
NNPCL is neither responsible for the policy of fuel subsidy or its removal. It is very unfortunate that Dr Banire would descend to the level of castigating it for the fuel subsidy debacle that has plagued Nigeria and on the basis of that label the company that has over the years patriotically borne the brunt of the fuel subsidy policy as a black hole.
Banire’s analysis fails to take into consideration the huge challenges of products smuggling, pipeline vandalism and crude oil theft that the company contends with daily. Barely three months after the Federal Government announced the removal of fuel subsidy, it became difficult for both major and independent petroleum products marketers to import petrol because of the foreign exchange policy. They could not source forex to continue to bring in petrol. Since then, NNPCL has been importing the product and selling at almost half price in keeping with the provisions of the Petroleum Industry Act (PIA), which designates it as the fuel supplier of last resort.
There have been supply hiccups here and there because of the financial constraints imposed by the transaction. Just imagine the hardship the nation would have suffered if the NNPCL was not there to play the role of supplier of last resort! NNPCL is the reason Nigerians continue to enjoy lower pump prices for petrol than they would ordinarily pay for the product. How then does such a company become a black hole? For Banire, NNPCL is responsible for everything that is wrong in the oil sector. He even blames smuggling and the unauthorised sale of petroleum products to street urchins who in turn trade it in the black market in jerry cans on the NNPC Ltd.
But does he have proof that unpatriotic marketers who divert petroleum products meant for local consumption to neighbouring countries are NNPCL staff or representatives of the company? Does he have any shred of evidence that the boys who sell fuel in the black market in jerrycans source their products from NNPCL retail stations? The least one would expect from a lawyer of Banire’s standing is a fact-based and not speculative commentary.
The NNPC Ltd has turned a corner since 2018 when it began to prepare for the enactment of the Petroleum Industry Act, which was eventually passed into law in 2021. Apart from deepening its commitment to accountability and transparency by regularly publishing its audited annual financial statements, the NNPCL has become a profitable company with an undisputable growth trajectory.
The company recorded an unprecedented N3.29 trillion profit in its recently released 2023 audited financial report. But this fact is conveniently lost on Banire who insists that he has not seen any difference between NNPC as a corporation and the commercially focused NNPC Limited that was incorporated in 2021. Fortunately, it does not take Banire to see or believe that NNPCL, as presently constituted, has broken away from its debilitating past for it to be true. He is at home with the legal maxim: “Res Ipsa Loquitur”, meaning the facts speak for themselves.
While one cannot dissuade people like Banire from criticising the NNPCL, they must refrain from standing facts on their heads just because they want to be populist or be in the good books of the public. Besides, the Banires of this world should also not be intentionally mischievous in their assertion that the NNPC Limited is exercising an overbearing influence on the regulators. One expects that given the level of their educational accomplishments, they should have the capacity to research very well into the subject matters of their editorial interventions so that they do not argue, assert and progress in error(s).
In the corollary, it is either Banire is being mischievous or ignorant of the assertion he made in his write-up that the NNPCL influences the NUPRC and the NMDPRA who are the two independent regulators. If he lacks a clear knowledge of the workings of the sector, he should be humble enough to seek clarifications so he could be well informed. NNPCL is an operator with a number of refineries under its purview. The Port Harcourt Refinery will soon take off. As a matter of fact, the refineries under the NNPCL are operators. Therefore, they are subject to the regulatory framework and regulations set out by the NMDPRA. The operator(s) cannot, therefore, exercise overbearing influence on the regulators. This is impossible. Pure and simple.
***written by Olufemi Soneye
