Speaking at this year’s Wole Soyinka Media Lecture series to mark the 81st birthday of Professor Wole Soyinka, in Abuja, yesterday, el-Rufai also advocated privatisation of the nation’s four refineries and the removal of fuel subsidy by the Buhari administration. According to el-Rufai, with the ‘death’ of NNPC, it would allow for the coming on board of a brand new company that would be commercialised and capitalized, adding that the action has become imperative against the back drop that NNPC has over the years constituted itself as a parallel government, a country on its own, with Nigeria another country different from the corporation. He said the account of the NNPC was last audited in 2005, and accused the NNPC of remitting only about 58 per cent of the money it earned between 2012 and the first half of 2015 to the federation account. His words: “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 worth of ‘domestic’ crude oil but paid only N1.66 trillion to the Federation 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 per cent of the monies earned between 2012 and the first half of 2015. A company with the audacity to retain 42 per cent of a country’s money has become a veritable parallel republic. “If we do not kill NNPC, NNPC will kill Nigeria. Any organization that takes 50 per cent of federation revenue for itself and gives you the change has no right to exist. It is evil, it must die, it is just the manner of the death that we must talk about.” A new company The Kaduna governor said the nation needs to replace the NNPC with another company that could raise capital from the capital market and the international financial market for its operations. His words: “What is wrong with NNPC and why would a new oil company be different? There are few things wrong with the way NNPC was structured, and I think President Buhari, who set up the NNPC along with Mr. Sunday Awoniyi, should know about this. “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.
The corruption and nonchallance that have hobbled the NNPC are symptoms that its best days are over. We should give it a deserved funeral so that a new institution, active and nimble, can promptly replace it. NNPC’s subsidiaries and associated companies can be reviewed, restructured and privatized or commercialized as appropriate, consistent with national interest and objectives. “We need a mix of fresh strategic thinking and a firm commitment to reform. We need to define exactly what we want the oil industry to be and to achieve, and then define the structure that can best deliver it. An efficient and productive oil sector, able to create jobs, spur industrialization and earn more revenues requires that we tackle the monster that the NNPC has become. “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. “It was a mistake to assume that NNPC should collect revenues meant for the federation. We should open an account where the money should be paid into rather than having it paid to the NNPC. “The law that created the NNPC gives it the opportunity to be opaque in every area of its operations. Despite all the deductions it made, the NNPC still collects between $7 billion and $12 billion from the budget in terms of joint venture cash calls. Other national oil companies do not collect cash calls from their countries’ budget.” No benefit from subsidy Governor el-Rufai, who was one of the leaders of the Occupy Nigeria group that spearheaded the mass protest that stopped the government of the immediate past President Goodluck Jonathan from removing fuel subsidy admitted that subsidy has not benefitted the generality of Nigerians. According to him, fuel subsidy was benefiting only a few corrupt members of the Nigerian public. His words: “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. “Why is it that in this most crucial of sectors, it has been possible for briefcase companies to walk away with big assets, billion naira subsidy payments?
“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. The downstream oil business in Nigeria has morphed into one optimised for the pursuit of subsidy payments. “We see thinly-disguised periodic hostage-taking as the subsidy barons seek to pry open government coffers. It is time to tackle the corruption in the subsidy regime. We can discuss how the resulting subsidy savings will be spent to improve lives, while guaranteeing stability of supply to the domestic market. “We have a President with the integrity to responsibly manage the savings and the experience of managing special interventions based on subsidy savings. Let us say bye to foreign exchange drains, opaque crude swaps, offshore processing agreements and other devices that have derailed and distorted the subsidy regime, to our national detriment.”
Title : If we don’t kill NNPC, NNPC’ll kill us —El-Rufai
Description : Speaking at this year’s Wole Soyinka Media Lecture series to mark the 81st birthday of Professor Wole Soyinka, in Abuja, yesterday, el-Rufai...
