Nigerian National Petroleum Corporation: Antidotes for Some Of Its Numerous Challenges

There was a time when the Nigerian National Petroleum Corporation (NNPC) was an epitome of effective service delivery. In that epoch there was no such thing as ‘black market’ in the retail of petroleum products. Pump prices were uniformed. Long queue on Filing Stations was non-existence. Whether or not there was fuel subsidy was only insider information.

NNPC worked at full optimum capacity, and provided jobs for many people. But with time all sorts of unwholesome news started filtering from the grapevine about NNPC operations. Such bad news sound like this – Nigeria now exports crude oil abroad which is refined and imported back into Nigeria. This meant that NNPC does not only pay for the cost of exporting the crude abroad, and the cost of refining but it also pay for importing back into the country the refined oil. This is the genesis of oil subsidy.

Oil subsidy therefore becomes a measure to cushion the incidence of high cost of production and refining of oil. The question then everywhere was what has happened to our three (3) Refineries located at Rivers State; Delta State; and Kaduna State. Answer in response to this public curiosity laid the blame on faulty facilities in these Refineries that needed overhauling. The result was that these Refineries were not refining oil at all or they were just operating at a very low optimal capacity resulting to a heavy shortfall in domestic needs of petroleum product.

Later, it was no longer news that NNPC indeed refines crude abroad. What has remained rumour is whether or not those foreign Refineries are ‘owned by prominent Nigerians’ who are supposedly statesmen. This tended to suggest that the comatose conditions of our local Refineries are an inside job.

All these are some of the problems that those who inherited NNPC post military era had to grabble with. The question here is how can the transformation agenda of Mr. President help to ameliorate the numerous challenges confronting the NNPC?

A personal view point on such panacea
Currently NNPC is a sole corporation. This explains why its operations are marred with all sorts of politicking. It is the proverbial hen that lays the golden egg. Here, we are talking about public fund that are superintend by a few. The world over it has become an acceptable hypothesis that government is not a good manager of economic institutions. This explains why privatization has become a domineering principle in running institutions that were hitherto created as sole corporations.

If it is now agreed that NNPC should be privatized so that the field is left open for private participation in upstream activities in Nigeria, then caution must be exercised. Otherwise we may end up vesting economic power on few individuals which may become counter-productive of the goal of such exercise.

The above point is made having regard to the fact that currently there are only three Refineries in Nigeria. Privatization in this circumstance may result into an aggregation of economic power in the hands of a few. This would be defeatist of the much flaunted advantages of privatization which means that goods would be available at affordable prices as a result of competition.

Therefore if an upstream activity in Nigeria is to be taken out of state control it is advisable that such a measure should be gradual. Efforts should be made to encourage private individuals to build Refineries. Government should do all it can to assure prospective investors in this sector that it would hands off upstream activities immediately such private Refineries start functioning.

Refining oil abroad
The rumour mill is more effective where the right of the people to know are left oblique. The transformation agenda of Mr. President must be seen to be transparent. It is agreed that the rot in the NNPC is not the creation of this administration.

But a transformer must be ready and willing to tackle headlong all inimical acts that militate against effective functioning of any public institution. The starting point in tackling the mess in NNPC should first clear the fuggy about prominent Nigerians’ ownership of Refineries abroad. If this allegation is true, the Nigerian public are entitled to know whether this Government has kicked the buttocks of such individuals. If it is an unfounded allegation, the public is also entitled to get assurances from the Government that such thing never existed.

Reform Measures
Illegal oil bunkering and selling of petroleum products above regulated pump price are being carried on in full public glare. This is an indictment of relevant agencies of Government that are supposed to curtail and eliminate such practices. The transformation agenda of Mr. President cannot be said to be on course when citizens are being short change daily in various ‘illegal’ Filing Stations. Neither can the confidence of the citizens on the transformation agenda be guaranteed when the most vital source of revenue of the economy are being plundered by unpatriotic elements.

I suggest that the time is now rife for the NNPC to create a Department vested with the responsibility of curtailing ‘illegal’ Filing Stations selling petroleum products above pump price. Such a Department should also be charged with the duty of protecting oil pipe lines from the unscrupulous acts of oil bunkers. The National Assembly should be involved in this effort through enacting appropriate legislation. It is an indisputable fact that the various agencies of Government involved in monitoring Filing Stations in order to stem selling of petroleum products above approved rate have failed woefully in that regard. They have also not being able to curtail oil bunkering.

A Department charged with such responsibility that is directly under the supervision of NNPC can do well. First, the salary in NNPC is good. Second, discipline against erring staff of such Department within NNPC will be swift as extraneous body is not involved. If the staff in such proposed Department are well trained, care having been taken in their recruitment they can be more effective in check-mating the activities of oil bunkers, and illegal Filing Stations.

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