The Nigerian National Petroleum Corporation transited from a fully owned government oil agency to its new status as a limited liability company. This was unveiled July 19th 2022 in Abuja by the President Mohammadu Buhari.
This is in line with the provisions of the Petroleum Industry Act(PIA) to enable it function effectively and compete with its global peers as well as allow private investors own shares in the new company.
NNPC LTD is now being structured to run as a commercial venture. The company is expected to make profits declare profits to her stakeholders and hold annual general meetings (AGM).
However there are concerns that this is just commercialization with government maintaining majority share holding than privatization as the case with Nigerian Liquefied Natural Gas, (NLNG), with government having 49% and investors 51 %.
An industry expert Henry Adigun says “that the NNPC Ltd can do business on her own running it’s affairs. This is what other countries have done like Brazil’s Petrobrass and Saudi Aramco.
Another concern is as the Managing Director of NNPC Ltd said NNPC Ltd will no longer be spoon feeding Federal Account Allocation Commission (FAAC) with remittances confirming the fear of analysts.
A Professor of Political Science, Chubah Eze of Anambra State University says ” it is like placing the horse before the chat. Public policies lead to boomerang. The gains pay backs and set backs are there The Nigerian economy can’t continue like that. For instance government companies have been conduit pipes for embezzlement. A number of concerns need to be addressed before taking off. Like the state governments need sensitization so that they can adjust and know what to expect except there are things not known yet or to be put in place otherwise it’s like pouring old wine into new wine skin.
Why not repair the refineries so that they are functioning. Now price of fuel has gone up. All in all it is doing the same all over again.
Prof Chubah says that ” the incorporation will not work because the internal machinery is still the same without any change in staffing.”
Thus he maintains that what is needed is a new orientation and approach which will ensure viability. The issue of derivation is not yet factored into the new arrangement.