The
Nigerian Petroleum Industry has been troubled in recent times. One of the most
recent ‘troubles’ was the irreversible
disruption of the market by Dangote, the sabotage by those whom we thought were
his friends and the bolekaja cum ogu-ikpu response by genuine and fake interested parties. There is
also a court case instituted by EFCC against Gidado Ibrahim and Halimat A
Tejuosho for collectinh $1000000 from
Oluseye Yomi-Tejuosho to facilitate her appointment as the GMD of NNPC. May be
this is in the court because it did not work out. However I am surprised that
the
‘givees’ are being charged but the giver is ‘exempt’; after all, the
giver and givee of ‘kickfronts’ are supposed to be guilty. Anyway, we
are pursuing transparency. Another trouble was the axing of
Mele Kyare and his replacement with Mr Ojulari, who started on a tempestuous
start when he was said to have resigned before the news went into voicemail. Of
course there are other issues as whether they were paying subsidy or cost recovery
or not, the relationship with Oando, which bought or resold all or some of the
fuel stations, the culture of the President being the Minister of Petroleum (or
rather the Minister of NNPC) and the incestuous relationship between the opaque
oil octopus and the president or the amorphous presidency.
There
was a perception of calmness when the Minister of Petroleum, in his capacity as
the President issued the EO926 (Executive
Order 9 of 2026) on 13/2/26. The order
abolished the 30% management fee and 30%
retention for the frontier
exploration fund so that all government entitlements from oil and gas were to be paid directly into the Federation Account. It
was aimed at restoring the ‘constitutional revenue entitlements for all
tiers of government’. However, the
practical objective is to increase what should be SHARED and in a sharing
economy, everything is about what is shared, whether through subsidy
‘removal’ ‘restructuring’ the foreign
exchange market or overhauling of the
tax system. For instance, it is
estimated that EO926 will add about N15trn
to FAAC pool---for SHARING
No
attention has ever been paid to the
crucial question of ‘where does the money go’? The fact
that N800bn was deducted from the FAAC allocations to renew the hope of the one
on whose mandate they stood before the elections and have continued to stand
thereafter came after the EO926 and has partially answered the question of
where the money goes! It is because of
this sharing paradigm that the South-South Governors’ Forum was ecstatic about EO9_26, describing it as ‘comprehensive, unambiguous and heartwarming’,
and that it raised hope that … the federal, state, and local governments
would begin to receive their rightful entitlements from the Federation Account’.
It is all about sharing! The SS_GF also stated that ‘remitting Royalty Oil, Tax Oil,
and Profit Oil directly to the Federation Account will significantly plug
revenue leakages’, describing the Presidents resolve to comprehensively
review the PIA as an ‘affirmation
that he is a leader that listens and places the interest of the people above
other considerations’ ( first clas sycophancy) and requested that the
States and the LGAs should partake in administering ( SHARING) what is due to
the communities because they are closer to the communities and it was wrong to
have excluded them from the administration of these communities.
This EO926 has troubled the waters in monumental
proportions, even though there are no open rumbles and grumbles. Nobody dares
do that! I wish to state upfront that I
never liked this ‘Executive Order’ business. In a pretend-democracy state,
with three arms of government, it is anomalous and opprobrious for one arm to
just decree whatever and it comes to be. This is more military than democratic.
I admit though that we have been practicing one-armed
democracy as two of the arms willingly and intentionally
surrendered their arms to, or merged their arms with that of, the executive.
While admitting that I am not a petroleum economist, I want to ‘put
mouth’ into how this EO926
interfered with the Limited status of NNPC and its relationship with PIA , the ‘Grundnorm’ of petroleum
operations in Nigeria. This is in addition to its adverse impact of investments
in the oil sector and unemployment, and upturning the gains of PIA, as propounded by PENGASSAN and other ‘oily
tongues’
The
Israelites would have spent 40 days in the wilderness but the journey took 40
years, due to their intransigence, rebelliousness, and failure to follow simple
instructions. PIA was expected to last maybe 20 months in the NASS’s crucible but it ended up being quarantined for about 20 years in the legislative wilderness
as the Oil Majors were scheming to ensure that we
do not attain real oil independence; as Niger Delta
elders where striving to ensure that ‘Igbos do not take our oil’( though
they were comfortable if others took it), and that the framework for sharing
oil windfalls were as opaque as possible; NASS committees wanted to keep it as
long as possible so as to corner lobbying and siting allowances and the
Presidency wanted to ensure that it
continued with its chokehold on Oil Sector
operations, especially as it had become the norm for the President to be the
Minister of Petroleum, or better still, the Minister of NNPC and allied matters.
The PIA was signed into Law by PMB, that repentant and autocratic democrat (I
am not sure of what the situation is
today), under whose watch as Commissioner for Petroleum N2.8bn vanished, on 16/8/ 21. It was
aimed at reforming the petroleum industry, promoting transparency (wishful
thinking) and attracting investments.
NNPC,
which was established in 1977, operated as
one of the parasitic, parastatals
within the federal bureaucracy. However,
in line with the spirit of PIA, it became a Limited Liability Company on 19th
July, 2022. Since then, the question had been if it was (and is)
possible for the NNPCL to assert its limitedness or wean itself from the
suffocating grip of the government, or for the government to let go of its most
beautiful financial bride, which became
one of the departments in the presidency
when the ‘olori-oko’ became the MOP (Minister of Petroleum). However the
transformation to a Limited Liability Company, even though a private one, was
received with cautious optimism by stakeholders of the oil industry.
Reuben Abati, who
is an ancestor of sorts in this writing business, penned an extensive and
incisive treatise on the birth of NNPCL. In an article, which was published in the Guardian on the birth of NNPCL, he
declared that ‘The new NNPC is expected to do things differently to
attract investment, promote innovation, eliminate corruption and inefficiency,
and ensure clarity. It must measure up like Saudi Arabia’s Aramco, and Brazil’s
Petrobras. Its business model must work for the country’s benefit’. He
however went on to warn us not to
jubilate so early because the ‘NNPC still remains in the public sector. That is why it is still called
Nigerian National… The only difference is that as a commercial entity, it will
now have to pay more attention to its profit and cost centres. While there is a
limit to which it can dictate price and profit, it must be noted that it can no
longer do business as usual’. He also recalled
the sure-footed statements of Mele Kyari,
the then GMD under whose tenure NNPC
published its first P&L account that
(i) NNPC going forward would be responsible to
its shareholders as a limited liability company, (2) whatever service it
provided for the Federal Government would be for a fee, (3) subsidy burden was not the responsibility of the NNPC, but that
of the Federal Government and (iv) NNPC was committed to transparency, accountability, and
accounting rules.
There
are many things wrong with this EO. Generally, an EO allows the Executive Arm to adopt legalized
shortcuts in the process of performing executive functions, especially
during emergencies but it should not override existing laws. It is therefore not
expected to have legislative implications. It is not a Legislative Order or
Judicial Order or a Combined Government Order. So,
when the Executive issues an order that violates an existing law it should be a
cause for worry. This is because EO_9 has legislative and judicial
implications. And the NASS, the ‘owners’
of this law, which is supposed to be doing concentrated ALUTA because of the slap in the face, did not say
‘pim’!(
well, after the disastrous outcome of the selectoral primaries, the issue may
come up from the wounded lions who lost out in the high-wire power-play).
Sometimes ago, there was an EO that directed procuring agencies to buy made-in
Nigeria goods. There was no alarm because that was within the realms of the
Executive. By the way, I don’t know the extent to which the Presidency and
other MDA’s obeyed that beneficial EO because I know the type of vehicles I see
in the president’s entourage or the type used by wicked Nwike! If the
Executive cannot transfer money from one project to another without legislative
approval (That is if and when it wants to be law-abiding), how then can it give
a directive that contravenes an existing law?
Beyond the legislative implications, which is
treasonable in all ramifications, is the fact that NNPC is a Limited Liability
company. It is not an arm of the executive. So, how can the executive arm of the FGN, issue a directive to a company
that is limited by shares and duly registered by Corporate Affairs Commission?
And that is why I ask about the impact of this development on the limitedness
of NNPC Ltd. Is it a limited company in practice, or a limited company in name or
is it an arm of the Executive? On
21/7/22, Ben Akabueze, the then DG of Budget Office declared that the price at which fuel is sold is a
matter of Government policy. So, the NNPC limited has limited input into this
matter even when it is a marketer and a regulator. Secondly, as a Limited
Liability Company, NNPC is expected to conduct its operations, prepare its
accounts, get it audited and then pay the accrued dividends to the shareholders,
as approved. So, where and how does this issue of sharing come into play? I
know that it is not a Public Limited Coy but shareholders are paid dividends.
How many times have the shareholders met (even if in private)? As a limited
company, the President and the presidency, should only get involved if they
were acting on behalf of the shareholders but not as the CEO of Nigeria
unlimited.
One
of the most ridiculous offshoots of this
EO9 affair was the defense proffered by Taminu Yakibu, the DG of the Budget Office,
who is also the secretary of it’s implementation committee. He informed us that: “Section 162 requires revenues
accruing to the Federation to be paid into the Federation Account for
distribution in accordance with constitutional allocation principles. The order
of legality is clear: revenue must first enter constitutionally recognised
accounts before it can be appropriated, shared, or spent. EO9 operationalises
these provisions in the oil and gas sector by directing direct remittance of
petroleum revenues, including royalties, taxes, profit oil and gas, penalties,
and related receipts, into constitutionally recognised accounts and by
tightening reconciliation and transparency across collection, custody, and
reporting. EO9 does not intrude into legislative competence. Section 60(1)
preserves the procedural autonomy of the National Assembly; EO9 does not regulate
legislative procedure, amend the Petroleum Industry Act, or repeal any statute.
It is an executive instrument issued under Section 5 to ensure faithful
execution of the Constitution and applicable laws.” In line with
BATiocratic norms, he asked ‘parties disputing the move’ to Go to Court and that before then,
‘the executive is duty-bound to protect Federation revenues, uphold
constitutional supremacy, and strengthen fiscal integrity for FAAC
distributions, budget credibility, and macroeconomic stability.” This is an Ambuscade,
do your worst attitude and approach, forgetting
that we are in a democracy.
The Federal Government of Nigeria acted in a
way that we the people perceive as treasonable because it violated an existing law. Instead of the Ministry of
Justice to attempt an interpretation, reinterpretation or misinterpretation of
the development or liaise with the NASS to quickly sort out the matter, the
Chief Budget Officer took it upon himself to quote sections of the constitution
and give legal interpretations! A budget officer defining and defending a
constitutional matter when we have fully paid legal officers in the federal
government employment?
Since NNPC became a limited liability company, the government has been
carrying on as if nothing had changed, giving directives, making
appointments, and issuing policy
guidelines. On 1/3/26, we heard that
that NNPC secures presidential approval for $20bn FID BONGA deepwater project, to attract 20bn
FID and position Nigeria for a new era in deepwater production. How can this
be? The NNPC management and bard ought
to have undertaken cost-benefit analysis, approve the project and fulfil
all regulatory legal requirements, while
the government comes in as a regulator or as a shareholder. At times, officials of the Federal Government speak on behalf of NNPC,
trying to defend its actions and attacking those who attack
a limited company. This incestuous
relationship between the NNPC and the government must stop. The
government should relate with NNPC as a limited company, abiding by the
memorandum and articles of association.
When I was a HSC student at Federal Government College, Enugu (1975-77)
the Commissioner for Education (I think it was Ahmadu Ali, who eventually
became Ali-Must Go!) was scheduled to visit the school. Before that
date, the Principal summoned a special assembly of all the students and staff and pleaded with us to ‘pretend
to be good’ within that period. In this matter, the FG should to pretend that it is relating with a limited liability NNPC. Directing a limited liability
company on what to charge or how to charge is anomalous. On this current
matter, the Executive, which has the
power of ‘life and death’ over other arms can amend the PIA and the speed with which the electoral act was
passed, transmitted and endorsed, evidences the fact that the PIA can be
amended within an hour.
Of
course, the signs and wonders happening within the NNPC, limited or unlimited,
are causes for grave concern. Its opacity is world-class and any day the
Guinness Book of Records pays attention to that direction, NNPC will surely win
some gold medals. I am not an accountant
and so, I cant comment on its accounting
practices, principles and policies. However I know that they must have
graduated from boiling the books to cooking the books. Efforts must be made to
enhance the transparency of its operations. One of the causes for concern all
along had been how NNPC, as an operator,
and thus a competitor, should be a regulator. If you remember that sometimes
ago, NNPC
had declared itself as the
sole offtaker of the Dangote fuel, requested for offices
within the Dangote petroleum complex so as to have permanent representatives there , fixed the prices, and did/said many
unbelievable things! Yet , NNPC is a private company of its own, competing in
the same market with Dangote! How will it look if the Central Bank opens a CBN Commercial Bank and
competes with FBN, GTB, UBA , ACCESS et al? Even when CBN ordered government
agencies to open operating accounts with
it in
early 1990s, it created such
confusion and upraor that the directive had to be rescinded. So, we need to
reset the ‘neck’ of NNPC but it has to be done properly! As our people
would say, you should not include pepper while preparing an eye ointment.
Transparency
is imperative but must be done within the legal framework. However I laff when this government talks of
transparency, accountability and all that. I have just heard that INEC now
lacks the power to ask about certificates in assessing the candidacy of intending political contestants.
I remember how a court ordered NYSC NEVER to state that it did not issue
governor Mbah’s certificate. The issue of the missing N210trn
from the NNPC coffers is still in circulation as it has refused to die.
The NNPC also spent N6bn on world-class rebranding.
I have
earlier referred to the monetization of the appointment into the NNPC
Boss-ship. Anway, life goes on!
By the way, can EO9_26 discover the missing
billions from NNPC?
I wish to
confess that my attention and
interest in this EO9_26 was heightened by Mary Efumbrugh, that calm,articulate,
calculated and logical lady through one of her posts. It was in one of those
posts where she usually makes earth-shaking
expositions while appearing calm and harmless.
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