By Bassey Udo
The new Nigerian National Petroleum Company Limited (NNPCL) must reposition itself as a proactive catalyst for spurring sustainable economic growth of the country, Minister of State for Petroleum Resources, Timipre Sylva, has said.
The Minister spoke on Friday at the NNPCL headquarters in Abuja at the commemorative final cutover of the transition from the old national oil company to new public entity regulated under the provisions of the Companies and Allied Matters Act (CAMA) 2007.
On July 1, 2022, the former NNPC was legally transformed into a CAMA company following the commencement of the implementation of the Petroleum Industry Act (PIA) 2021.
As part of the PIA Implementation Framework approved by President Muhammadu Buhari, the Implementation Steering Committee headed by the Minister of State for Petroleum Resources, Timipre Sylva, was given a 18 months transition period.
During that window from the effective date of the comment ement of the implementation of the PIA, the new NNPC was expected to complete the full transfer of assets, interests and liabilities from the old entity as part of the commitment to achieve a viable National Energy Company.
Speaking at the event, Sylva said he felt fulfilled that the NNPCL was able to cross the February 16, 2023 deadline.
“Undoubtedly, the crystallisation of a 20-year old petroleum industry reform journey calls for accolades and celebration. It is afterall, a feat to be celebrated. However, the birthing of this law (PIA) is only a means to an end, the end thereof being the enthronement of a vibrant, sustainable, efficient and investment-friendly petroleum industry, which will improve our revenue base, create jobs and support our economic diversification agenda,” the Minister said.
To this end, Sylva said deliberate efforts must be made to implement the law in a manner that best achieves the objectives in line with the yearnings and aspirations of Nigerians whose lives would be impacted by the consequences of NNPC’s |decisions and actions.
He said the final cutover deadline to cross the February 16, 2023 marked NNPC’s final cessation to exist (as per the provisions of Section 54(3) of the PIA, to usher in a new era of value creation for the common good of all Nigerians.
The PIA, the Minister said, empowered NNPC Limited to operate like every private company in Nigeria with exemption from the Fiscal Responsibility Act, Public Procurement Act and TSA in order ensure there are no excuses for failure.
“In return for this empowerment the PIA expects a strong commercially-oriented National Energy company with an obligation to operate profitably and deliver dividends to shareholders,” Sylva told his audience made up of staff and top management of the NNPCL and other key industry players.
He reminded them that the NNPC Limited was positioned to lead Africa’s gradual transition to new energy, by deepening natural gas production to create low-carbon alternatives and change the story of energy poverty at home and around the world.
Commending the PIA Implementation Steering Committee, Sylva assured the Implementation Working Group and the three institutions, consisting the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and NNPC Limited that the government was fully committed to the transformation of the petroleum industry, and unlock the potentials in the entire value chain.
“Nigerians and our foreign stakeholders are watching and waiting, and we cannot afford to let them or ourselves down. We must do all that it takes to deliver on this assignment in a manner that best achieves our collective vision for bringing the anticipated gains to the country,” he said.
Earlier, in his presentation, the Group Chief Executive Officer of the NNPCL, Mele Kyari, reviewed some of the challenges the company was still contending with during the transition period.
Apart from the challenge of managing a difficult relationship with the Federal Ministry of Finance, Kyari said the NNPCL was still contending with the rising cost fuel subsidy, which constitute a major drain to its resources.
He disclosed that subsidy payment on Premium Motor Spirit, popularly called petrol, now gulped more than N400 billion monthly, as the company was spending about N202 as subsidy on every litre of petrol consumed in the country.
With an average of about 65 million litres daily consumption volume for petrol, Kyari said NNPCL has strived to meet its obligations of supplying the commodity at a high cost, and which was constituting a severe strain on its cash flow.
“NNPCL is the sole importer of petrol into Nigeria and has continued to play this role for several years running, bearing the huge cost of fuel subsidy,” he said.
“Other private oil marketers stopped importing petrol into Nigeria due to the difficulty encountered in accessing the dollars required for the imports of PMS.
“Today, by law and the provisions of the Appropriation Act, there is subsidy on the supply of petroleum products, particularly PMS, into our country. In current data terms, three days ago the landing cost was around N315 per litre.
“Our customers are here. We are transferring petrol to each of them at N113 per 3litre. That means there’s a difference of close to N202 for every litre of PMS we import into this country. In computation, N202 multiplied by 66.5 million litres, multiplied by 30 will give you over N400 billion of subsidy every month,” he explained.
Kyari lamented thatu the continuous funding of petrol subsidy by NNPCL was ongoing without the mandatory refunds from the Federal Ministry of Finance, Budget and National Planning, despite that subsidy payment was budgeted for in the Appropriation Act.
“There is a budget provision for it. Our country has decided to do this. So, we are happy to deliver this. But it is also a drain on our cash-flow, and I must emphasis this,” he said.
“For as we continue to support this, you will agree with me that it will be extremely challenging for us to continue to fund this from the cash-flow of the company when you do not get refunds from the Ministry of Finance.
“We are working with them (finance ministry). But it is an extensive pain on the cash-flow of our account. However, we will continue to support this country and deliver energy security,” he said.
