Published On: Mon, Jul 13th, 2015

NNPC runs parallel govt – El Rufai

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El-Rufai-NasirBy Osby Isibor

Governor of Kaduna State, Malam Nasir El-Rufai has called for the ‘killing’ of the Nigeria National Petroleum Corporation (NNPC), describing it as a parallel government to the Federal Republic of Nigeria.

Malam El-Rufai who was a guest speaker at the 7th Wole Soyinka Centre Media Lecture series held in Abuja yesterday, said that an organisation that illegally retains 42% of Nigeria’s income, can best be described as a parallel government.

Speaking on the theme: ‘Nigeria and the Oil fortune’, Malam El-Rufai said, “The long and short of the situation of our oil industry is best exemplified by the parallel government called the NNPC. In 2012, it sold N2.77 trillion of ‘domestic’ crude oil but paid only N1.66 trillion to the F1ederation Account. In 2013, it earned N2.66 trillion but paid N1.56 trillion to FAAC, in 2014 N2.64 trillion but remitted N1.44 trillion. While between January and May 2015, it earned N733.36 billion and remitted only N473.2 billion! That means that the NNPC only remitted about 58% of the monies earned between 2012 and the first half of 2015. A company with the audacity to retain 42% of a country’s money has become a veritable parallel republic!

“The NNPC feels entitled to consume more resources than the 36 states, the FCT and the Federal Government combined! The example just given is only with respect to domestic crude oil sales. Similar leakages exist in NPDC, NAPIMS procurement and subsidiary budgets.

“This country can no longer afford to maintain an NNPC that arrogantly, unlawfully and unconstitutionally spends an unhealthy proportion of national oil earnings on itself.

“We should replace the NNPC with brand new organizations that are fit for purpose: – among others – a commercialized and corporatized national oil company and new industry regulators. This new national oil company should be capitalized once and for all, and then freed to fend for itself like other national oil companies do, seeking its financing independently from the financial markets and paying due taxes and royalties”, he stated.

He regretted that easy money from oil has led to the neglect of other endowments, especially agriculture, and called for a diversification of the economy to exploit other sources of revenue for the country.

Malam El-Rufai also lamented that the Petroleum Industry Bill which was meant to reform and sanitise the oil sector could not see the light of the day, eight years after it was initiated.

“During the Obasanjo years, I had the responsibility to constitute Oil and Gas Implementation Committee that led to the drafting of the original Petroleum Industry Bill as an instrument for reforming the oil sector. Eight years after the exit of that government, the PIB has not become law, mainly through the willful neglect of the successor governments that prioritized their personalized stranglehold on the sector’s revenues above its reform and efficient performance for national benefit”.

The Kaduna State governor further described the oil subsidy regime as a fraud, adding that the choice to either continue or scrap the subsidy payment rests squarely on Nigerians.

“Subsidy regime as we have it today in Nigeria is a fraud. About N971 billion was budgeted for subsidy payments in 2014 alone (more than twice that was eventually paid). You all recall how trillions of Naira were paid out as oil subsidy in 2011, when only N254 billion was appropriated. No one has been successfully prosecuted for this scam”.

As a way forward, Malam El Rufai said, “Let us be realistic enough to choose the most pragmatic options when we confront national problems. We should incentivize competent investors to acquire majority shares and management control in all our refineries and sell to them crude oil at market prices, and remit the proceeds directly into the Federation Account!

“Tackle the corruption and distortion in subsidy regime: I daresay that the oil subsidy regime has neither grown our people nor guaranteed stability of refined product supplies. What subsidy has achieved is create a huge hole in the budget and a new array of overnight billionaires”.

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