The Nigerian National Petroleum Company Limited has made it clear to the Federal Government as well as the State Governments and the Local Governments not to expect remittance of money to the Federation Accounts Allocation Committee for sharing to the three tiers of government on monthly basis
Chief Executive Officer of NNPC Limited, Mele Kyari stated this at the Presidential Villa in Abuja on Tuesday shortly after President Muhammadu Buhari officially unveiled the Nigeria National Petroleum Corporation ( NNPC) as a Limited Liability Company inline with Petroleum Industry Act (PIA)
He explained that the firm was now a private outfit and had nothing to do with FAAC anymore
According to kyari, based on the organization latest transition from a public corporation to a limited liability company, all monetary arrears to the committee were owed by the old corporation and not the new oil company.
President Buhari had during the unveiling of the NNPC Limited on Tuesday, declared that the new entity was henceforth free from institutional regulations, adding that the oil firm would from now on conduct itself under best international business practice.
The NNPC's Boss however clarified that the company would still pay its taxes to the government as an oil firm
"We will pay our taxes, royalties and deliver dividends to our shareholders,” he stated
“You now have a smarter, more responsive and much more accountable company that must act within the premises of all regulations that are in Nigeria for private companies", Kyari added
“It must also meet the standards of best practice in every industry in terms of governance, complying with regulations and beyond these, eyes are on the ball that your shareholders are expecting you to deliver value to them.
“That value must translate in two forms. One is that they must see dividends and the second part is that you must deliver energy in this country. This company is now in a position to do both of them because it is now a nimble company, can act, borrow and return peoples money quickly.”
He said the firm would now make decisions very quickly, get the best class of people anywhere in the world, inject them into the company and get its Initial Public Offer ready by June 2023.
“I am sure Nigerians will see a very different company in the coming days and months. And we are convinced that by the mid of next year this company will be IPO ready,” Kyari stated.
Proving further explanation, he said, “IPO ready means that you have systems and processes lined on the side of profitability and is a company that is accountable to its shareholders and stakeholders.
“Simply that is what IPO processes look for; to see that you have the assets. Today government has transferred those assets to NNPC and we have very ample assets that nobody has in this country and, of course, not even in Africa.”
Asked to explain how the oil firm would handle subsidy on petrol being a commercial entity, Kyari replied that fuel subsidy was not a burden of NNPC.
“Subsidy is not NNPC’s burden. Subsidy is the decision of the state and in every jurisdiction anywhere in the world, countries see them differently. In some countries, they put petroleum tax on top of the market price of these products,"he explained
“So when decisions are to be made in some jurisdictions they will reduce the level of taxation. That also is another form of subsidy. In some countries, you have zero taxation but you will pay the market price for the commodity. That also in a way, in fiscal system, looks at it from a subsidy point of view.
“In very many countries, a leader can decide that I don’t even want my countrymen to buy it at the market price. I’m ready to reduce that price for them so that they can buy.”
Kyari added, “In either case, whichever way the decision and the policy of the state decides, you know NNPC is there in the space to provide the product to the state at commercial value and, of course, it is also our duty to deliver to the customer at the price that the state wants.
“So it is no longer an NNPC issue. NNPC will have no issue with this. NNPC will be happy to supply because we will now see the state as our customer.”
Findings showed that between January and May this year, the oil company had spent N1.274tn on petrol subsidy, being the sole importer of the commodity into Nigeria. It, however, described its subsidy spending as under-recovery of a Premium Motor Spirit/value shortfall.
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