By Stephen Ubanna
President Muhammed Buhari , who incidentally is the senior minister of ministry of Petroleum Resources, appears to have used his first term in office to study the nation’s oil industry and never to be hard on the Petroleum product importers and the marketers including the Nigerian National Petroleum Corporation, NNPC, to avoid sabotage .
H e may have feared that if he should come hard on the NNPC and the marketers they may gang up to creat artificial scarcity of petroleum products in the country, particular petrol, to put the Administration in bad light. The fallout was the fluctuation of petrol Consumption in country to force the government to believe that that the country fuel consumption level has skyrocketed to 53 million litres per day to the 2016 figure of 36 million litres. NNPC officials may have warmed themselves into the heart of Ibe Kachukw, the minister of state , ministry of Petroleum Resources, when they gave him the financial figures of September 2018, showing that the landing cost of petrol in the country which was at the neighbourhood of N180.00 per litre.
Based on the figure , they had teamed up with the Markers to paint the Hameed\ Ali, a retired Army Colonel led Nigerian Customs Service, NCs, to give the false impression that 10 million of the petrol imported for the local market were smuggled through the nation’s porous borders the , particular in the north and the south west, to justify why the daily petrol consumption has gone up and the need to review upwards the price of a litre of petrol to N180.00 from the current price of N145.00 per litre to stop the smuggling of the product. Investigation by
Insiders told the Value News that the country subsidy regime which stood at about N1.2 trillion in 2015 has shut up to N1.3 billion in last four years. But market watchers believe that subsidy is about N1.86 trillion.
Note that that the NNPC, which is the sole importer oof petrol in the country has cried out to the government that with the current price of N145.00 per litre in the market it may not have the capacity to pay the difference. ”We are still owning the money arising from such subsidies”, NNPC officials had said. They got it wrong.
Unknown to them, Buhari and Kachukwu, the minister of state overseeing the daily activities of the nation’s oil industry including NNPC, have a different agenda to on how to block the loophole to forestall the VIPs from further thieving of imported petrol and holding the nation to ransom. Kachukwu, at the instance of the President was said to have reached out to the technocrats in the in the Department of Petroleum Resources, DPR and NNNPC, to ascertain the figures , reeled out by the Corporation which he believes may have been spiked.
This may informed the reason why the minister who got the Presidential approval gave the nod to DPR, to ”install the N17 billion tracker technology that could track every product landed into the country through the seaports for the first time. This is bad news for NNPC , officials and the marketers who have been fat from petrol imports at the expense of Nigerians.
Kachukwu is optimistic that in a matter of months the actual truth would come out about the quantities of petrol consumed in the country dail. ”We will be able to say for certain , what we really consume daily”, he said. An agrived minister further said, ” The government may have found solution to the lies of NNPC and the marketers by instituting the quiet audit to look at the NNPC bogus figures ”why we are going up especially when the price of petrol has been hiked per litre”.
Note that the minister had consistently rejected the layman excuse given of NNPC and the marketers over alleged smuggling of petrol across the country insisting that something is spiking that sort of daily petrol consumption in the country. The minister may have told those that cares to listen going by the tight security mounted at the nation’s Border posts that it was not possible to smuggle 10 million litres of petrol , at a go daily, as the smuggler would require thousands of trucks to do so. The country Borders are not that porous , he had said. This may not be the only areas of revenue leakage in NNPC. Another area was the Production Sharing Contract with the International Oil Companies: Shell Petroleum Development Company, SPDC. Exon Mobil, Nigeria Agip Oil Company, NAOC, among others.
Recall that NNPC had raised alarm in 2015, that the country has lost N60 billion naira to the oil producing companies by going into the PSC,with the Companies because of their financial Capacity to search and drill oil without any financial responsibility on the part of the government which settles to collect Signature bonus, royalty and other fees agreed in the business deal.
The oil companies brought the funds and the expertise to undertake the more technical offshore exploration activities within Nigeria shores . According to NNPC sources, the government own the acreage while the oil companies are the contractors. It is not surprising why the companies employ the latest technology in the search for oil in the offshore acreage because of the profit motive. Officials of NNPC, a source disclosed are not brought too close to know the amount of money spent in the search for oil by the Companies to avoid pock-nosing into the business.
According to the source , if they hit oil in commercial quantities , they were sure to recoup their investment which are only known to them and make the profit but if they found no oil in the course of their searching, they would bear the loss . Th International oil companies may have cashed in on the loopholes in the deal to shortchange the government with their NNPC Collaborators. Eight Companies, including SPDC, were the first to e in nter such a deal with the government which had a 30-year lease before the terms were toughened 2000 , by former Presidents Olusegun Obasanjo in 2000 and Goodluck Jonathan in 2015. But before then the government had been at the losing end as the International oil Companies smile to the bank and repatriate billions of dollars to their country annually.
Femi Falana, a senior Advocate of Nigeria, SAN, , who may not be happy with the way the international oil companies were going about the PSC deal due to the refusal of the Regulatory Agencies, particular, the DPR and NNPC, to enforce the implementation of the terms of the PSC , between the government and the oil companies , had written to Kachukwu in 2015, in his Capacity as then Group Managing Director of NNPC, and minister of state , Petroleum Resources, to provide details how the country lost $60 billion to the International Companies involved in the PSC deal with the government.
NNPC may have given Falana , the ammunition to know that there is too much financial leakages in the nation’s oil industry in 2017, when it disclosed that the country had lost over $60 billion ”due to the refusal of the Regulatory Agencies officials to implement the terms of the PSC . It was an indictment on itself.
Shetima Bana, acting Chairman of the Revenue Mobilisation ,Allocation and Fiscal Commission, RMAFC, was said to have also confirmed the loss of the $60 $billion , arising from the non implementation of the said PSC , with the companies by DPR and NNPC last January .
This may have strengthened the resolve of Falana, to head to Court to Challenge Kachukwu andd NNPC on the matter. The minister appears to be waiting for such an opportunity as he has vowed to speak on the matter in Court. Many believe that the revenue loss would have been worse if the duo of former Presidents Obasanjo and Jonathan had not taken the initiative to review the terms of the Agreement.
Note that the Nigerian Extractive Industries Transparency Initiative , NEITI, had earlier raised alarm that between 2008 and 2017, the government had lost over $28 billion from Crude oil sales to outdated PSC it has with the international oil companies, operating in the country. The group had said that the country lost that much because it failed to review the 1993 PSCs with the International oil companies. the money may have been lost as the government is not making any reference to it.
