Nnpc loses n546b to failure of reforms in three years – jordan 93.9fm gas national average 2008


Also, while the corporation earned N2.046 trillion in revenue in 2015, it spent N2.313 trillion, leaving a loss of N267.138 billion. Its corporate headquarters recorded the highest loss of N162.736 billion, while its product supply and distribution arm, the Pipelines and Products Marketing Company (PPMC) came second with N162.06 billion loss, followed by a combined loss of N82.09 billion from its three refineries.

Its financial and operational report in 2016 showed that the corporation earned N1.726 trillion, but recorded an expenditure of N1.923 trillion. Losses from its refineries alone totalled N78.95 billion. In a review by Bloomberg, the latest account, showed that losses from refineries and corporate headquarters alone stood at $500 million.

Industry experts told The Guardian that besides the absence of reform, NNPC’s self-regulatory and above-the-law modes were partly to blame. They also expressed concern over the leadership tussle between the Minister of State for Petroleum Resources, Ibe Kachikwu, and the NNPC Group Managing Director (GMD), Maikanti Baru.

At a 2015 election eve debate organised by the Nigeria Political Parties Discussion Series (NPPDS), Lai Mohammed, the then National Publicity Secretary of the All Progressives Congress (APC), now Minister of Information and Culture, had said the APC government would not only unbundle the NNPC, it would ensure it publishes its balance sheets periodically for public scrutiny.

In April, the under-recovery or subsidy paid on petrol reportedly hit N1.4 trillion. Losses on refineries, which have a combined capacity of 445,000 bpd but turned out small quantity of refined product, stood at about $100 million in 2017 alone.

Sources close to the ministry said the face-off between Kachikwu and Baru has even prevented the ministry from holding board meetings. They said the vacuum created by the tussle has been delaying reforms promised by the current administration.

NNPC’s Group General Manager, Public Affairs Division, Ndu Ughamadu, however, denied this, saying board meetings were still being held. He insisted the corporation is working towards profitability with necessary mechanisms but did not outline what these mechanisms were.

“How many times have you heard about the board meetings of the NNPC? When was its full account ever published or audited? We do not hear about the quarrel between the minister and GMD. But the two people remain there, and everything is buried under the carpet,” said one of the sources.

The Senate had set up a committee headed by former Sokoto State Governor, Aliyu Wamakko, to investigate claims by Kachikwu over lack of due diligence in the award of contracts. Nothing, however, has been heard from the committee since the matter broke last year.

The absence of properly outlined roles and accountability mechanism, and the failure by the president to relinquish the office of Minister of Petroleum Resources are holding the country’s economy to ransom, said Auwal Ibrahim Musa, Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC).

“The tension is not over because the issues that have been raised are not addressed. There is mistrust between the GMD and the minister. What we are seeing is window dressing. If they are working together collaboratively, and if the whole process is transparent, there won’t be these issues,” Musa said.

“Subsidy is a good example. This is a government that told us it is not paying subsidy. Then all of a sudden, it introduced subsidy through the back door. The opaque system has remained as it was in previous years. The promises of unbundling the NNPC have not come to pass,” said Hassan.

Professor of Petroleum Economics and Policy Research, Centre for Petroleum Energy Economics and Law, University of Port Harcourt, Wumi Iledare, linked the poor performance of the NNPC to the delay in the passage of the PIB. He stressed that the eventual passage would remove government control and drive the company towards profit making.

He regretted that the absence of core reforms has resulted in decline in revenues, oil and gas production, national reserves and investments. Also, uncertainty in legal, regulatory, fiscal and commercial frameworks has led to declining competitiveness and infrastructure deficits.