In the face of the challenges in the oil sector, particularly the current tightness in the supply of petrol, it has become fashionable to blame the national oil company, the Nigerian National Petroleum Company Ltd (NNPC Ltd), for everything. Last week, it was Prof. Pat Utomi who railed and fumed at the NNPC Ltd calling it one of the most opaque and unreliable companies in the world. Before then, The Punch had published an editorial in which it described the NNPC Ltd as a danger to Nigeria. The latest of these vitriolic attacks is by Dr. Muiz Banire, a Senior Advocate of Nigeria (SAN), and former Commissioner of Transport and Environment, Lagos State, who contended in his column in The Sun that NNPC Ltd is the black hole of Nigeria.
Considering all that is going on in the petroleum sector, it would appear justifiable to call out the NNPC Ltd as some people have been doing in recent times. But most of the diatribes have been based on sentiments that are not rooted in facts. Railing at the NNPC Ltd without a thorough understanding of the issues that threw up the current challenges in the oil sector, as most of the commentators have been doing, will yield no good for the country. At this critical intersection, the task for all well-meaning Nigerians should be how to find lasting solutions to the mischiefs in the oil sector and not to look for scapegoats, as Dr. Banire has done.
According to Banire, Nigeria has been experiencing fuel scarcity since 1973 on the back of fuel subsidy and the NNPC Ltd is responsible for it. The assertion that the NNPC is responsible for this state of affairs is moot. The policy of fuel subsidy is not the preserve of the NNPC. Various administrations over the years have thought it wise to subsidize the cost of petroleum products for citizens. They came up with different methods of doing that. The role of NNPC Ltd has been to implement the policy as decided by government. At a point when the various administrations felt that the fuel subsidy policy had become a burden that should be done away with, they made it known. NNPC Ltd, as the national oil company, implemented it. This was the case in 2012 when the nation went up in protest against the decision of government to remove fuel subsidy. The same scenario repeated itself in 2019 when the present administration came up with the policy to remove fuel subsidy. NNPC Ltd is neither responsible for the policy of fuel subsidy or its removal.
It is very unfortunate that Dr Banire would descend to the level of castigating the NNPC Ltd for the fuel subsidy debacle that has plagued Nigeria and on the basis of that label the Company that has over the years patriotically borne the brunt of the fuel subsidy policy as a black hole. His analysis fails to take into consideration the huge challenges of products smuggling, pipeline vandalism, and crude oil theft that the company contends with daily, and in spite of which it manages to keep the nation going with crude oil production and fuel supply.
Barely three months after the Federal Government announced the removal of fuel subsidy, it became difficult for both major and independent petroleum products marketers to import petrol because of the foreign exchange policy. They could not source forex to continue to bring in petrol. Since then, NNPC Ltd has been importing the product and selling at almost half price in keeping with the provisions of the Petroleum Industry Act (PIA) which designates it as the fuel supplier of last resort. Yes, there have been supply hiccups here and there because of the financial constraints imposed by the transaction. Just imagine the hardship the nation would have suffered if NNPC Ltd was not there to play the role of supplier of last resort! NNPC Ltd is the reason Nigerians continue to enjoy lower pump price for petrol than they would ordinarily pay for the product. How then does such a company become a black hole?