NNPC, ‘missing funds’ and subsidy debacle
These are certainly not the best of times for the Nigerian National Petroleum Corporation (NNPC). From allegations of non-remittance of oil revenue to those of operating above the laws of the land and constituting itself as a parallel government to the Federal Government of Nigeria, the anti-NNPC sentiments have come full-cycle and assumed the dimension of a mob action with the recent call by Governor Nasir El-Rufai of Kaduna State to “kill NNPC”.
As is usually the case in every mob situation, objectivity and truth have been sacrificed even by those who have been given the assignment to investigation allegations of financial malfeasance against the NNPC by the National Economic Council.
But try as we may to deny the reality of the financial situation that is upon our country by engaging in a mob action against NNPC or any other institutions or personalities, the truth is that the days of oil boom are over (at least for now) and the earlier Nigerians (especially those in government) wake up to that reality with a view to taking responsibility to diversify the economy and develop alternative revenue sources for the country, the better for us all.
It is a known fact that since the last quarter of 2014 the price of crude oil, the major export and revenue earner for the country, has been falling. From about $95 per barrel in September 2014, the price dropped to about $85 (a difference of $10) in October that same year.
This trend has been sustained over this period with the unfortunate consequence of dwindling oil revenue flow into the nation’s coffers for onward distribution to the Federal, states and local government tiers of government as has been the culture.
But rather than look for creative ways of shoring up national revenues in the face of dwindling oil prices, all that we have seen so far is the demonization of the revenue generating agency for the oil sector, the NNPC.
This is not meant to be a defense for the national oil corporation that has been hobbled by years of government interference and scandals.
It is rather a call for a barefaced and critical look at the situation on ground with a view to averting the calamity the nation is certain to fall into if we chose to continue on the path of trading blames instead of rolling up our sleeves to work to build a prosperous nation.
This work should include, of course, recovering every penny misappropriated by NNPC or any other institution or personality and meting out appropriate sanction on them to serve as deterrent. But it should not be restricted to that as the mob action against NNPC tends to suggest.
This is because, at the end of the day, it would be discovered that much of the so-called unremitted or missing oil revenue for which the corporation is being pilloried emanated from the federal government policy of fuel subsidy which it has to implement.
This much has been stated by NNPC in the past when it contended that it was erroneous for Nigerians to talk about missing oil money when it (NNPC) is saddled with the uneconomic task of bringing in kerosene and petrol at the cost of N100 and above per litre and selling at N50 and N87 per litre.
The huge loss resulting from this is what is referred to as fuel subsidy. Ironically, while Nigerians, including the government, insist on having fuel subsidy, they turn around to label the cost of the subsidy as unremitted oil revenue or missing oil money and castigate NNPC for it.
This was why a former Group Managing Director of the Corporation, Engr. Andrew Yakubu, once declared that if oil money was missing, then it got missing in the pockets of Nigerians who bought kerosene and petrol at less than the cost price.
Other components of the unremitted or missing oil revenue, according to the explanations offered by NNPC, are the losses arising from crude oil and products theft and losses during the frequent cases of pipeline breaks.
But to the Nigerian public, including those in government, it is convenient to charge these losses to NNPC insisting that they are unremitted revenue or missing funds.
When the price of oil was high enough to guarantee a sizeable allocation to the various tiers of government, the huge losses were not noticeable or were rather overlooked.
But with dwindling oil revenues on the back of falling oil prices, the losses have suddenly become very noticeable like a sore thumb.
But rather than look at them dispassionately and think up ways of cutting the losses while at the same time creatively diversifying the economy to break away from dependence on oil revenue, all we have been treated to is the anger and fury of a mob. Sadly, mob action is not known to solve any problem, much less the gargantuan type that is starring on in the face.
Now is the time for us to think and come up with solutions to the dwindling oil revenues and the mono-economy anchored on oil before our march on the road to Greece gets to an irreversible point. •Sanni, an oil and gas consultant, wrote from Abuja