OBSERVATION: NNPCL Has Outlived Its Usefulness
A brief history of Nigeria will x-ray how Nigerian National Petroleum Company Limited (NNPCL) has outlived its usefulness and for it to be dismantled or its roles and responsibilities reviewed in the face of present reality. Nigeria is the largest crude oil producer in Africa and the 6th largest producer in the world. It has different names for its crude oil such as Qua Ibo, Escravos blend, Brass River, Forcados, and Pennington Anfan but its oil is classified ‘Bonny light,’ also known as ‘light’ and ‘sweet’ because it is largely free of sulphur and among OPEC members, it is the largest producer of this special oil mostly found and produced in the Niger Delta – South-South region of Nigeria – inhabited by Ijaw, Itsekiri and Ogoni who were naturally major producers and exporters of fish, and renowned for trading and shipping centre before the discovery of commercially viable oil by Shell in 1956 at Oloibiri in today’s Bayelsa State with the profit sharing of 50/50 between the government and Shell before 1960s when Texaco, Gulf and Mobil purchased concessions.
After the official independence in 1960 and becoming a Republic in 1963 via autochthonous constitution, there was a military coup d’état against the civilian government on January 15, 1966 wherein General Aguiyi-Ironsi was made the Head of the Federal Military Government, serving 6 months before being overthrown and assassinated in a counter-coup. Ironsi was succeeded by Major General Yakubu Gowon who established Supreme Military Council in same 1966. But there were some brouhaha that the counter coup which began as a mutiny from the mid-night of 28 July to 1 August, 1966 was planned and orchestrated by northern soldiers to checkmate Ironsi ethnic favouritism towards Igbos which resulted into secessionist agitation under the leadership of Igbo military governor headed by Lieutenant Colonel Chukwuemeka Odumegwu Ojukwu. The meeting to resolve this impending crisis was held in Aburi, Ghana between 4th – 5th January, 1967 where Gowon, Ojukwu and members of Supreme Military Council agreed to Nigeria becoming a confederation of regions. Different meanings and interpretations of the summit known as Aburi Accord led to Ojuwku declaring Biafra independence and plunged us into unnecessary civil war that lasted till 1970 with estimated loss of 2 million lives.
By 1971, the victorious Nigerian federal government, under Yakubu Gowon, nationalised the oil industry by creating Nigerian National Oil Company (NNOC) by decree to consolidate its dominance in the oil sector as it was also planning to join organisation of Petroleum Exporting Countries (OPEC) at that period. With his successive successors – Murtala Mohammed and Olusegun Obasanjo – at oil boom era, corruption started creeping into the ruling elite, rewarding their political supporters based on tribal, religion and selfish calculation for oil contracts, field allocations and concessions amongst other oil businesses. By 1979, NNOC was merged with the Ministry of Petroleum that transformed into Nigerian National Petroleum Corporation (NNPC) with much more power than the combined NNOC and the Ministry of Petroleum. And since then, it has been solely responsible for harnessing Nigeria oil and Gas Reserves; it’s been in charge of exploration, production, refining, marketing and retailing petroleum products. At this period, Nigerian refineries supplied all domestic fuel requirements while excess was sold to neighbouring countries.
However, NNPC which was transformed from a corporate into limited liability company in 2022 as NNPC Limited, the only entity licensed to operate Nigeria petroleum industry, has been characterised with inefficiency, waste and mega corruption. Under NNPCL watch, Nigeria’s four refineries – two in Port Harcourt, one each in Kaduna and Warri – have been dysfunctional and unable to produce optimally for over two decades but were officially shut down in 2019 for underperforming notwithstanding $25 billion spent to fix them for decades, making Nigeria a net importer of refined petroleum for decades despite being a major crude oil producer. Meanwhile, a private refinery – Dangote Refinery – with 650,000pbd capacity was built with $20billion.
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Under fuel import regime, successive governments claimed to be subsidising imported fuel so as to make it affordable for the people as any increase in the price of fuel would ignite increase in the prices of goods and services, especially foods commodity and consumables. Anytime this so-called subsidy was removed in bit, which meant increase in price of fuel, it would ignite increase in prices of goods and services, especially food commodities and cost of transportation, making life more miserable for the average citizen. At every occasion this occurred, the governments had always claimed that subsidy removed would be used to develop strategic infrastructural deficit like roads, hospitals, education, etc. Today, that claim and story cannot be accepted even by the marines as all these infrastructures have decayed. Accruals from subsidy withdrawal have continued to find their ways into the private pockets and bank accounts of the successive ruling elite and their cronies. Economic and Financial Crime Commission (EFCC) is overwhelmed with thousands of cases of theft of our collective wealth by this gang of thieving ruling elite. How many thousand names and cases shall one catalogue?
As I write, NNPCL has stopped importation because Dangote refinery has begun refining fuel in Nigeria. That automatically stops the so-called subsidy. But interestingly, NNPCL has assumed the role of sole buyer of Dangote fuel and fixing the price which is more expensive than the imported fuel. The highest official price of imported fuel per litre a day before Dangote rolled out was N820 after the freight and all landing cost. It has now reportedly fixed the price of Dangote petrol to between N950 per litre in Lagos to N1,050 in most Northern Nigeria, banning independent markers from direct access to load from the Dangote refinery after every effort to frustrate the refinery accessing crude oil for production.
Oil which is supposed to be an advantage and blessing to Nigerian people has become a curse in the hands NNPCL under the watch of successive ruling elite that have continued to hurt Nigerian people and pulling millions into abject poverty. NNPCL is cruel to Nigerians; it has outlived its usefulness and the new abnormal role of being Dangote refinery sole agent of buying and distributing fuel is unacceptable. The National Assembly must intervene by reviewing NNPCL roles, with a view to outrightly disbanding and replacing it or significantly restructuring it to be of profitable and beneficial service to Nigeria. Enough is enough!
The opinions expressed in this publication are solely those of the author. It does not represent the editorial position or opinion of OSUN DEFENDER.
Ademola Yaya is a columnist, author, policy analyst, pro-democracy crusader and communications specialist.
