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Dollar Earnings from Oil: The Big Question Tinubu Must Ask NNPC if He’s Sincere
If President Bola Ahmed Tinubu is staid or rather sincere with sanitising the nation’s oil revenue earnings and rebooting the battered Nigerian economy, the question he should be asking the Nigerian National Petroleum Company Limited (NNPCL) now is: How much oil does Nigeria actually produce on daily basis for sale at the international markets; and where are the dollars from our crude oil sale?
Discrepancies in the figures of Nigeria’s daily crude oil production output given by people and authourities that should know are as confusing as they are laughable and should make every Nigerian curious about the integrity of the trumpeted transparent operations and accounting for the nation’s oil proceeds. The minister of petroleum (oil) has a different figure; the NNPC has a different figure and the foreign multinational oil companies have their figures also different from those of the NNPC and the Ministry.
This question has become imperative because if we don’t know how much oil is pumped out every day, how can we know how much oil that leaves our shores and what we are supposed to earn as revenues from sales.
Where do we get the figures used in planning and budgeting as there is no office even the Presidency, that can give you the correct figure of the nation’s daily oil production with certainty? This is tragic for a nation like ours.
Nigeria gets about 90 percent of its dollar earnings from export of crude oil despite all the grandstanding from some other sectors. Whether anybody wants to hear this or not, the inability of the Nigerian National Petroleum Company Limited (NNPC) and its partners to bring in dollars from oil sales is exacerbating the crisis in the Nigerian foreign exchange market where a dollar currently exchanges for over N1,600 at the unofficial window. This is just the truth!
As said in a recent podcast by the Emir of Kano, Lamido Sanusi Lamido, “Oil is not going to grow our Gross Domestic Product (GDP). If you took out all the oil in Nigeria today and sold it, it would raise our per capital income to be $4,000. We won’t even be a middle income country. Oil will never make us rich but it is working capital. It is the lubricant for our import dependent economy and we cannot afford to continue producing the oil and not seeing the revenue.”
Why is NNPC not able to bring in dollars from sale of our crude oil? Where are the dollars because Nigerian crude grades are not sold in naira?
Reiterating what I had serially said, Emir Sanusi reminded us again that nobody in this country including the President can with exactness tell you how much oil we pump out every day for sale. The Finance Minister cannot tell you because he doesn’t have a metering system that reports to him.
“Finance Minister cannot tell you that today this is how many barrels of oil we produce and exported on daily basis. He can only rely on NNPC telling him.”
Truth be told, those barrels are not just figures, they are revenues that belong to Finance ministry. We’ve been talking about this for several years. We need a metering system. The Finance Ministry needs to know how much oil we are producing every day and how much oil we are selling and where the money is going “because if you don’t fix the leakages in that system, if you don’t fix the revenue, the dollar revenue issue, you will never fix exchange rate problem and in turn the economic problem.”
This is an issue that this country must address because this NNPC people have taken us for ride for too long.
All the figures being dangled by the managers of our national economy including the NNPC about our daily oil output are fictitious. Take it from me! There are no reliable figures to work with.
All the vessels that come to load in Nigeria at least the ones we see and verify both onshore and offshore, tragically, are calibrated physically. Shamefully, that is what is still being done in this country in a 21st century oil accounting business- physical calibration. Haba, who do us this!
So, we don’t even know the real calibration of those vessels. All we know is that we have approved for a vessel to load for instance 30,000 metric tonnes of crude. But we don’t know if actually the capacity of the vessel is 50,000 or even 100, 000 metric tonnes. So we don’t even know how much those vessels take away from our shores. The NNPC and the foreign multinational operators have taken this joke too far!
Nigerian Upstream Petroleum Regulatory Commission (NUPRC) does not measure oil output, regardless of claims by Abuja that production has now risen to 1.7 million barrels per day.
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Now this is the big one: what’s not known to many in this country including our National Assembly members, present and past, is that most of the oil we produce now have been sold in advance in a crude-for-credit swap arrangement by the managers of the NNPC and some gladiators at the Presidency under General Buhari. So we are pumping out oil on daily basis not to sell and generate revenue but to pay backlog of debts collected by few individuals in collaboration with the NNPC without the Finance Ministry in the know.
Is it not absurd that a state owned oil company could unilaterally go to creditors without the Ministry of Finance and the Central Bank to collect huge loans using our national asset (crude oil) as a bargaining chip? You and I know that those foreign creditors particularly China and the West will smartly or rather criminally package the agreement to ensure they get more than 300 percent or more in crude oil equivalent of whatever money they are lending to the syndicate. And this is what NNPC thought out as the best option to raise funds for their illicit affairs. That’s Nigeria for you!
Also, we were told by no less person than our President that the Federal Government no longer pays subsidy on petroleum products. So where are the dollars that we were previously expending on the scheme?
The World Bank said Nigeria will save more than 21 trillion Naira ($28 billion) in two years after scrapping petrol subsidies, that’s about $14 billion in one year). Have we saved anything tangible since the President at his inauguration announced cancellation of subsidy payments, if yes what? Before it was under recovery, now we don’t have under recovery anymore, so where is the money (dollars)?
Whether Tinubu wants to hear this or not, there should be an urgent quest to shine light on NNPC(L) and its activities in recent years especially under the leadership of the present Chief Executive Officer, Mele Kyari. We need to ask Kyari to explain all the loans he collected in exchange for our crude oil; who authourised the swap deal; and what the loans were used for. But will President Tinubu do it? No! Reason being that since he came to into office, he has been more interested in digging his interest deeper in the oil sector as we saw in OANDO buying off all of ENI’s (Agip) onshore assets in Nigeria. The God of justice will judge all of you one by one, Amen!
- Mr. IZEZE is a National Daily Columnist, and can be reached on: iizeze@yahoo.com; 234-8033043009 (sms only)