• Sunday, July 14, 2024
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Atedo Peterside backs Gov el-Rufai in calling for end to NNPC

Nine major mistakes Nigeria made – Atedo Peterside

Founder of the ANAP foundation, Atedo Peterside is siding with Kaduna State Governor Nasir el-Rufai in calling for a total overhaul of the state oil company NNPC as well as government’s approach to managing the oil sector.

Nigeria’s fiscal and foreign exchange crises have been worsened by the near total collapse in oil production supervised by the NNPC and earlier this week, the Kaduna state governor said NNPC is the problem. He also said nothing has changed since NNPC became a limited liability company.

In his response, Peterside said, “I could not agree more with @elrufai. Little or nothing has changed at NNPC Limited. They should stop wasting our money on CNN adverts in which they praise themselves unconvincingly. If they did anything good, their good works would speak for them.”

El-Rufai who has been consistent with his calls for the abolition of NNPC which he called a big problem for Nigeria, said virtually all government revenues when it came, came from taxation which will be levied even after NNPC is abolished.

According to the governor, “we are living on taxes. It is petroleum profit tax, royalties and income that tax that is keeping this country going because NNPC claims that subsidy has taken all the oil revenues. I don’t believe that. So, the government should sell everything in the oil and gas sector. I have been making this point since 1999.”

He said “the government should get out of whatever is left. Leave it to the private sector. Nothing has changed for NNPC other than adding “L” for limited. They are still taking our money. They are still declaring profit we do not see the dividends.

“NNPC is a big problem to Nigeria and unless we resolve it, it will bring Nigeria to its knees.”

He said the problem with NNPC is systemic and institutional and beyond one person”, a reference to current CEO of NNPC.

Earlier this week it was reported that Nigeria’s dwindling crude output has forced NNPC to defer payments to some local petrol suppliers by at least three months.

NNPC imports all the nation’s gasoline for road transport, swapping most for crude with international traders including Vitol Group and TotalEnergies SE and domestic groups such as Sahara Group Ltd. and Oando Plc.

As the nation’s oil production slumped to multi-decade low of less than 1.2 million barrels a day, NNPC has asked local importers to permit payment delays of at least 90 days, according to Chief Executive Mele Kyari.
The new deals created late last year involve “a longer credit period,” Kyari said in an interview in Abuja.

The availability and cost of gasoline are politically sensitive issues in Nigeria, especially in the run up to elections in February. The state spent 2.7 trillion naira ($6.2 billion) on subsidies from January to July to keep the pump price among the lowest in the world, according to NNPC data.

NNPC’s CEO is confident that a rebound in Nigeria’s crude production will allow the company to cover its deferred payment obligations. Kyari expects the country to add 500,000 barrels a day to its output by the end of November, mainly by restarting activities on the Shell Plc-operated Forcados export terminal and Trans-Niger pipeline.

If that happens, “we will meet all the deliveries and still have surplus crude production for cash,” Kyari said. “They know we can pay. Otherwise they wouldn’t supply.”

The new contracts operate alongside the original “direct sale, direct purchase” deals, under which NNPC is expected to provide crude before traders deliver the fuel.

Those local firms accepting deferred payments receive an additional premium per ton of gasoline, according to people familiar with the arrangements. So far, the companies involved in those new contracts are Sahara, Oando, MRS Oil and Duke Oil, a subsidiary of NNPC.