The affairs of the last days in this country trouble me greatly. The scrapping of fuel subsidy is not one of them though.
Agreed that the new president, Bola Ahmed Tinubu, in his “Jagaban” mannerism was very brash in his public announcement of the abolition of the fuel subsidy scam but we should not fail to note that the ongoing crisis as a result of that pronouncement was actually caused or rather escalated by the Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari.
Kyari owes Nigeria serious explanations on what has been running in his mind to have warranted the level of callousness/arrogance we’ve seen exhibited in the last few years in our oil and foreign exchange businesses as it concerns the nation’s apex oil concern.
Was it by callous flippancy or a deliberate design to blackmail that the NNPC henchman came out barely 24 hours after Tinubu’s Eagle Square announcement to inform the new government that the nation’s apex oil concern is still being owed N2.8 trillion as outstanding in its subsidy bills?
NNPC Limited, announcing increase in petrol price, conceals real retail price
The message from NNPC was very clear: if you are excited as the new president of the Federal Republic and waking up without due considerations to scrap the subsidy scheme, be also ready to find almost 3 trillion Naira to give to NNPCL except you don’t want peace to reign in the downstream. Can you just imagine that?
NNPC(L) under this man woke up one day without any study/survey whatsoever to announce to Nigerians that our daily consumption of petrol has jumped from about 35 million litres per day to almost 66 million litres and so the subsidy bill also jumped to almost 100 percent.
The only explanation was that marketers were smuggling the subsidised products to neighbouring West African countries. Trash! Whose responsibility is it to police the nation’s borders, is it not the same government that both the NNPC, Customs, DSS etc, are part of? All the concerned agencies report to one desk, at the Presidency, true or false?
How do ships come in and out of a country with a Navy with no one stopping them? How do smugglers pass through our borders despite the Army, Customs, Immigration, DSS et cetera? The answer is failure to govern or rather lack of willpower to be honest!
Kyari’s NNPCL and embarrassing harvest of indictments over sleaze
And as if he was not done yet, the same NNPC boss came out barely 24 hours from the first disclosure or rather threat to release a price regime for Premium Motor Spirit (PMS) popularly called petrol with outrageous 300 percent increment to be applied in all its retail service stations across the country.
The question to ask is: who made the NNPCL, a privately operating company, the regulator of the nation’s downstream? Why should the NNPC tell marketers what to sell their commodity in a completely deregulated market because that’s what the scrapping of the subsidy scheme means? You see why the NNPC is the problem! In the first instance, how did Kyari arrive at the prices he announced for the different sections of the country?
With whose authourity did the NNPCL ordered the release of the new pricing template and enforcement of its use across the country when there is a full entity created by the PIA to monitor, supervise, and regulate the activities in the nation’s downstream?
Who speaks for and on behalf of the government regarding changes in petroleum product pricing or even subsidy removal- the Presidency through the Ministry of Petroleum Resources or a private limited liability company (the NNPC Ltd)?
For several years now the NNPC has been the sole importer of petrol into the country. Whatever is sold by the oil marketers both major and independents are pickups from the company.
The company has also been the sole beneficiary of the subsidy largess. It brings in whatever volume of petrol with nobody monitoring them and also pays itself whatever it feels like taking as subsidy even before paying the balance of the nation’s oil revenue accruals into the Federation Account. This is a new culture that started under the Buhari government where the president also doubled as the petroleum minister.
Recall that several months under the Buhari government, Kyari’s NNPC outrightly refused to pay a dime into the treasury account citing subsidy payments or rather “under recovery” as reason for no oil revenue for the three tiers of government in those months.
NNPC(L) led by Mele Kyari, with three moribund refineries in Port Harcourt, Warri and Kaduna, decided without public knowledge or input, to buy 20 percent shares worth US $2.8 billion in Dangote Refinery. Meanwhile, the total amount required to revamp Warri and Port Harcourt refineries is US $2.65 billion. What is Kyari’s special interest in Dangote Refinery that is coming to compete with the NNPC refineries if they will ever be allowed to work?
The NNPC’s three exiting refineries has been down since the man came in as the GMD and now CEO of the new contraption and it does not bother his management team. Instead their priority is oil exploration in Bauchi, Nassarawa and Chad basins. Is it not clear that the NNPC does not want its own refineries to come back onstream because the company is raking in huge gains as a result of the refineries not working?
My suggestion is that NNPC should go ahead to sell its products in its retail outlets but should also be made to stop stifling other oil marketers who also should enjoy the enabling environment given to the NNPC in the foreign exchange arena. If the marketers also have access to forex to source and bring in their products at the CBN rate, competition will definitely level the prices of fuel across the country.
How can anyone explain that at the commissioning of the yet-to-be-completed Dangote Refinery, Godwin Emefiele, the famous Central Bank Governor, announced that Dangote had paid 70 percent of the loan he took for the Refinery? The Nigeria stock exchange does not have any record of share sales in relation to Dangote Refinery other than the NNPC investment. So what magic did Dangote perform with its CBN loan? The new government, if they are serious for a paradigm shift should interrogate how a Refinery that is not operational raised money to pay 70 percent of the loan it took for the project?
The new President’s declaration to literally fumigate CBN should commence immediately as this will serve an expected death sentence on what is left of Buhari’s policy ‘maggots’ apparently covered by Emefiele.
It is unimaginable how the CBN governor has been running the nation’s apex bank solely to service political patronages at the expense of the wellbeing of our national economy. The CBN for several years now has denied oil marketers both major and independents access to forex but freely hands over hundreds of millions of dollars to individuals by-weekly. There has to be a paradigm shift with the intention of “pursue, overtake, and recover all” if the new government is serious about doing things differently otherwise, na status quo ante o!
- Mr. Izeze is a National Daily Columnist and writes from Abuja. He can be reached via iizeze@yahoo.com; 234-8033043009 (sms only)