President Muhammadu Buhari on Tuesday unveiled the Nigerian National Petroleum Company Limited (NNPC Ltd), transitioning from the Nigerian National Petroleum Corporation (NNPC) after 45 years of being a public oil firm.
This has generated ripples from experts and industry players just as the new firm said it will expand its retail outlets to 1,500 within six months, cutting its monthly remittances to the Federation Account Allocation Committee (FAAC) while retooling its over 7,000 workforce.
Speaking on Tuesday at the State House, Buhari said, “It is, therefore, my singular honour and privilege on this historic day of 19th July 2022, to unveil the NNPC Limited, with focus on becoming a dynamic global energy company of choice to deliver energy for today, for tomorrow, for the day and days after tomorrow.”
Also speaking, the Minister of State Petroleum Resources, Timipre Sylva, lauded Buhari for the PIA 2021 that lingered for 20 years.
He said, “While the country was waiting for the PIA, Nigeria’s oil and gas industry lost about $50 billion worth of investments.
“In fact, between 2015 and 2019, KPMG states that “only four per cent of the $70 billion investment inflows into Africa’s oil and gas industry came to Nigeria even though the country is the continent’s biggest producer and the largest reserve.”
The Group Chief Executive Officer (GCEO), NNPCL, Mele Kyari, said the firm has created a robust expansion plan.
“We have taken a strategic initiative to achieve our mandate of ensuring energy security for our country by rolling out a comprehensive expansion plan to grow our oil retail outlets from 547 to over 1,500 within the next six months,” he stated.
Kyari, who later addressed the press after Buhari had unveiled the new company’s brand and slogan of ‘Energy for Today, Energy for Tomorrow’, said NNPC will no longer make remittances to FAAC but will pay all taxes, royalties and declare dividends.
“We are now a private company. Will MTN proceeds go to FAAC? We will pay our taxes, we will pay our royalties and we will deliver dividends to our shareholders,” he said.
Data from FAAC showed that NNPC would deduct N874.5 billion in the first half of the year as its remittance.
It also projected that the company will remit N122.7bn every month to FAAC, this year, from its trade, and so far, it has not deducted for six months.
When asked about the remittance status for seven months’ arrears of NNPC revenue due to FAAC since January, 2022, Kyari said that was with the NNPC as a corporation but not with the NNPC as a company whose existence began on Tuesday.
“Which arrears; that was the Nigerian National Petroleum Corporation,” the GCEO of the new NNPC Ltd stated.
Meanwhile, some petrol marketers on Tuesday released a new price list approval for petrol to sell above N165 per litre across the regions.
According to the regional price list effective today, the rate rose by N14 from N165 to N179/l for the South West, South South and South East regions.
The price was raised to N184 in the North West and N189 in the North East, representing a N24 increase, the highest in the new adjustment.
Petrol will now sell at N179 in the North Central region. Although the product will sell for N169 in Lagos, marketers will sell for N174 in Abuja.
There is also an upward adjustment in the ex-depot price in the Lagos axis from N148.17 to a range of N160 and N162.
Depots in Warri/Oghara have their rates adjusted to N162-N165, while Port Harcourt depots will sell for N165-167.
Daily Trust was yet to get a confirmation from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) which ought to announce the prices.
Its spokesman, Mr Apollo Kimchi, did not respond to the enquiries.
Price hike a temporary rebate, pursue NNPC independence – Experts
Analysts and petroleum marketers have hailed the new NNPC Ltd but called for the full implementation of the PIA 2021.
Commenting on the increment, the Chairman of the Northern Independent Petroleum Marketers Forum, Alhaji Yahaya Musa Maikifi, said, “Our major problem is that our refineries are not working.
“With the issue of this war (Russia-Ukraine), that is why the whole world is complaining, but if we are refining our products, we won’t be much disturbed by this. So, local refining of the product is the solution,” he said.
The Group Executive Chairman/CEO of the Benham Group, Dr Maurice Ibe, said the new price regime does not solve the problem in totality but reduces the hardship of marketers and eventually the consumers.
Ibe, who is the consultant for the Association of Distributors and Transporters of Petroleum Products (ADITOP), said until the germane issues in the sector, like bridging claims, dislocation between supply and nationwide distribution, among others, are addressed, the problems will resurface.
For the new NNPC, Ibe said: “They have to make themselves functional, effective and efficient. It is no longer the NNPC of yesteryears whereby you are just blowing government money.
“If they operate efficiently, it means Nigeria will gain, with the federal government still maintaining a substantial share in the company.”
An economic expert and senior partner at SPM Professionals, Paul Alaje, said despite the unveiling of the new firm, petrol subsidy payments will linger.
“Although the new NNPC is no longer a government organisation but a commercial one, the impact may not really be felt except the PIA comes onboard.”
On the purported petrol price hike, Alaje said: “Diesel and kerosene are no longer subsidised except for petrol, but when the PIA implementation fully comes on board, that’s when petrol subsidy removal can be effectively done.”
Fuel transporters demand immediate payment of N500bn bridging claims
Major players in the downstream sector of Nigeria’s oil and gas sector, yesterday, met in Kano under the aegis of the Association of Distributors and Transporters of Petroleum Products (ADITOP), where they strategised on how to engage the federal government over unpaid bridging claims.
The unpaid bridging claims, which they said are over N500 billion, have put many of the members of the association out of business and also made access to petroleum products difficult for the end-users, especially those in the northern part of the country.
Speaking on behalf of the association, its consultant, Dr Maurice Ibe, said the members have resolved to henceforth approach the government as a group to push for the prompt payment of these claims.
He said, “We are saying if you have paid over N70 billion, show us the proof; let us know who you have paid and how much you have paid those members. Let it be part of the negotiation and reconciliation.”
On threats to shut down the economy by the distributors and marketers, Ibe said with many of them already out of business, if nothing is done on time “it will affect the distribution of petroleum products all over the country