No to NNPC’s exemption from remitting operating surplus request

By Omoh Gabriel

The Nigerian National Petroleum Corporation’s (NNPC) request to the National Assembly for it to be exempted from remitting its operating surplus to the consolidated revenue fund is to say the least, absurd and unthinkable. The rationale for the request smacks of disrespect to the nation and to say the least, a cover up for the ever increasing level of corruption in the country. If all agencies of government come up with one excuse or the other for them to be exempted, who then will foot the bill of the nation?

NNPC as it stands, is supposed to be the cash cow of government revenue but on the contrary, it is a drain pipe. Nigerians must not forget so early the monumental fraud perpetuated by the NNPC in the subsidy scam as revealed by the forensic audit report of the organisation in which the NNPC was said to lack records to give details and full account of its operation.

To grant any agency of government exemption from remitting its operating surplus will be an invitation to anarchy. On several occasions, the Federation Account Allocation Committee has accused the NNPC of short- changing the nation by deducting at source what it considers as its operating revenue. More often, the NNPC management appropriates to itself funds not due to it.

Mr. Andrew Yakubu, Group Managing Director of the Corporation, in making the call in a message to an interactive session with House of Representatives Committee on Finance in Abuja believes he will have his way with the National Assembly. His argument is simply that the NNPC relied on internally generated revenue to fund its operations without subvention from government. 

“The Corporation wishes to seek the consideration, appreciation and support of the committee to exempt the NNPC from the remittance of operating surplus to the consolidated revenue fund,” he said.

According to Yakubu, the repairs of pipelines damaged by vandals are funded from the Corporation’s cash flows to ensure steady supply of petroleum products. “NNPC incurs huge costs in meeting its statutory and other assigned roles in the overall and overriding interest of the nation,” he said. Yakubu said the Corporation lost N300 billion, N111 billion and N193 billion in 2009, 2010 and 2011, respectively to oil thieves.

He added that the NNPC, like any other oil corporation, was not only managing oil business but also managing the challenges confronting oil production. The GMD said that the Corporation had been subjected to the pains of pipeline vandalism over the years. The Coordinator of Corporate Planning of the NNPC, Mr. Timothy Okon, said the corporation was operating under challenging circumstances to ensure that production was not affected.

He said that between 2009 and 2012, the Corporation lost 11 million barrels of crude oil to pipeline vandals. Okon attributed the Corporation’s inability to remit any surplus funds to the consolidated fund to operational losses suffered between 2009 and 2011. Mr. Anthony Ogbuigwe, the Group Executive Director, Refining and Petrochemicals, said NNPC lost 11.7 million barrels of crude oil in four years. The Chairman of the Finance Committee, Rep. Abdulmumin Jibrin (PDP-Kano), explained that the session was aimed at ensuring that government businesses were carried out with seriousness.

He enjoined officials of the Corporation to respond to several questions raised by members of the committee at the next sitting. Mr. Yakubu and his co-travelers did not tell the committee how Shell, Mobil and others affected by oil theft defray their crude losses to theft. If Yakubu were asking for more funding to combat oil theft whose perpetrators are known to them all in the oil industry, it would have been different.

The argument that it uses its internally generated revenue to fund its operation is normal. In budgeting, the cost is deducted as operational expenses before operating surplus. The NNPC would have taken care of its operational cost before declaring any surplus. Mr Yakubu, it is no news that the NNPC you manage is funding its operations with internally generated revenue. The Central Bank of Nigeria does, yet, it remits its operating surplus to government. The NPA, NIMASA and others do the same. Why should NNPC be different?

The Committee must resist every temptation and call the bluff of NNPC. What the NNPC should be telling Nigerians is the need for it to be privatised. In fact, it should help fast- track the Petroleum Industry Bill that will allow it to operate like any other oil company in the industry. To ask for exemption in the remittances of operating surplus is to say the least, insulting discerning minds in Nigeria.

Nigerians must not forget that the Committee has been locked in a battle with revenue-generating agencies of government over non-remittance of revenue to the consolidated revenue account. As long as they are Federal Government agencies, they must remit their surplus to consolidated revenue fund; that is what the constitution says. Period.