Lagos Boot party guber candidate decries NNPC revenue capacity
Afenifere endorses Oluwo for Lagos gubernatorial race
GOV E R N O R S H I P
Candidate of Boot Party, Olawale Oluwo yesterday said the present arrangement of leaving the entire crude oil dollar revenues of the country to Nigerian National Petroleum Company ( NNPC) Limited is a direct threat to the financial health of the Nigerian state.
Oluwo, a former Commissioner for Energy and Mineral Resources during the Ambode administration, stated this at the inauguration of the Boot Party Solutions Series, a weekly media event to proffer solutions to the challenges confronting Lagos State and Nigeria, particularly regarding 2023 elections.
According to him, such an act is a violation of the Nigerian Constitution and a major contributor to the increasing poverty in the land. He said that the NNPC Limited has since lost its legal capacity to act as a revenue- remitting platform of government.
Oluwo said by virtue of its conversion to a limited liability company, NNPC Limited should be removed from representing Nigeria as the counterpart in the various Joint Venture Contracts with the Interstate Oil and Gas Compact Commission ( IOGCS), because it is only a revenue collection and remitting agency that can play that role, not a company that is already conflicted, on account of its business activities.
He said the IOGCS could credit the crude oil proceeds due to Nigeria directly to the CBN’S offshore account without any intermediary company like NNPC Limited.
“To understand the abnormality of the present arrangement better, one only needs to imagine a similar conversion of Federal Inland Revenue ( FIRS) to a limited liability company, where it is allowed to retain its tax collection mandate and can use the tax collected to run its business operations and pay dividends to government anytime it is able to make profits.”
Oluwo proposed that the NNPC Limited should be retained in its present form because it was incorporated pursuant to the Petroleum Industry Act ( PIA), adding that there should be no change to its shareholding structure and business focus.
He said the present shareholders should be interested in building the capacity of its human capital to enable it compete as a profitable company in the oil and gas space.
“However, every limited liability company known to law conducts its business operations on the basis of the capital funds invested by their shareholders, for which Share Certificates are issued.
“Where the capital funds injected are inadequate, companies borrow money from the financial markets to fund their operations, subject to the limits stipulated in their Memorandum and Articles of Association. The financial markets have stringent criteria for calculating how much companies can borrow, which creates the necessary discipline that compels companies to strive for sustainable performance.”
He said the monopoly of NNPC Limited as the sole importer of petroleum products and manager of the fuel subsidy scheme in Nigeria is responsible for the present opaqueness in the sector and the financial crisis that Nigeria finds itself in.
“This should be discontinued and replaced with a decentralised competitive structure where NNPC Limited and other private sector operators can participate on a competitive basis.
“It is this level playing that will cure NNPC Limited’s conflict of interest, safeguard the nation’s dollar revenues and create the necessary competition that engenders efficiency, increase products supply side and ultimately drive down the price of petroleum products, until sufficient local production capacity is attained.
“In a competitive market, NNPC Limited is allowed to venture into new businesses, including buying crude oil directly from the IOGCS and refining it for sale in the local market or for export, using its own capital funds, not Nigeria’s earnings.” Meanwhile, the Lagos State branch of the pan Yoruba socio- political organisation, Afenifere has endorsed Oluwo as its gubernatorial candidate in Lagos State.
Afenifere chairman in Lagos, Tunde Onakoya, expressed optimism that the group, through the candidature of Oluwo, would “conquer” the tight rein of All Progressives Congress ( APC) presidential candidate, Bola Tinubu in Lagos. “For us, we have been in politics for many years. The present presidential candidate of the APC ( Tinubu) used to be a member of Afenifere, he came from America and joined us and we know how much Afenifere contributed in raising him.”
“He has left us and has not replenished what he got from us. It is through Oluwo that we are going to conquer him,” the Afenifere chieftain stated.