by Ola Emmanuel
The current global trade disruption that D. J. Trump is carrying out can be summarised in a sentence: you either choose to produce your goods within the boundaries of the US or be prepared to pay handsomely if you prefer to be shipping it in. He believes that he can trash the World Trade Organisation (WTO) and all it stands for; and despite the uprising and uproar, he is telling his people not to panic. Notwithstanding his wrong approach and terrible assumptions, you have to give it to him that he is acting out what he believes – America first. It is this national patriotism that is lacking in Nigeria.
Very few Nigeria’s government officials can be said to be patriotic. Left to them, the economy whose medium of exchange is naira should become dollar-denominated economy. They don’t see anything incongruous about it and they don’t believe that local production is an issue to be bothered about. Inasmuch as they are able to issue contracts, trade, and there are brokerage margins, to them the country is doing well. The care less about mounting costs of living, destroyed purchasing powers and devastated standards of living of the people. It is not of less concern to them that more than half the country’s population are multi-dimensionally poor and can hardly have a decent meal per day.
Is it possible for operatives of government agencies to work against the interests of a people they are supposed to serve? It is possible for state institutions to consistently act against the interests of the public by misusing state’s resources for their own interests. This misuse of powers against public interests by government officials may be rife where contracts are awarded and they manifest in form of high wire lobbying, cronyism, influence peddling, nepotism, extortions, graft, and embezzlement. Such institutional or political corruption often lead to creation of unusual bottlenecks and very slow decision making processes and unwieldy protocols and long delays before actions that will be in the interests of the public are taken.
Since the world-record Dangote Refinery started operation, information in the public space is that NNPC has consistently under-delivered on crude supplies to the 650,000 barrels per day refinery. Now, information from the presidency when the Naira-for-crude “effective immediately” order was given was that the Federal Executive Council approved that the 450,000 barrels meant for domestic consumption be offered in naira to Nigerian refineries, using the Dangote refinery as a pilot. If not until Dangote refinery made noise that it had temporarily halted the sale of petroleum products in naira the managers of the oil sector affairs would have continued as if nothing sinister is brewing. The 650,000 barrels per day capacity refinery lamented that there was a mismatch between its sales proceeds and its crude oil purchase obligations, which it said are currently denominated in US dollars. It appeared that some forces want the naira-for-crude arrangement to fail. This is where Nigerians should start raising their questions of which one of them, methinks, should be: why waiting till end of six months before discussing the naira-for-crude renewal? Likewise, how is the 450,000 barrels of crude oil per day meant for Nigerians to consume being handled and utilised by government officials in charge?
The above leads to the issue of Forward Sale Contracts and Loans-for-Crude deals that NNPCL has committed future oil production for years to come. Come to think of it, is the contractual obligations of NNPCL not already mortgaging Nigerians’ interests and peace; and is NNPCL not deliberately sabotaging Nigerians with business politics and competition war? Why, in the first place (and if that’s what was done), should the daily crude allocation for domestic use be included in crude-for-loan negotiations?
According to Thisday Newspaper and referencing a document it obtained from ‘impeccable sources’, “since the controversial ‘Project Gazelle’ in 2023, the NNPC has gone into at least two other agreements, tagged ‘Project Leopard’ and ‘Project Gazelle II’, which will cost the company $2 billion and $7.5 billion respectively”. As published in the said report, the NNPCL had entered into numerous deals to which it is obligated to service for as long as April 2034. While this on one hand, the challenges at the production, especially the intractable crude theft are on the other hand.
Wrapped in opaque, the quantity of crude oil that has been mortgaged by NNPCL and other oil sector agencies are unclear. The back and forth about naira or dollar pricing of crude and the premium sales by agents of the oil producing companies are in whose interests? The general belief is that refineries in Nigeria will continue to face inadequate crude supplies but such inadequacies would be a mitigated significantly if the daily crude allocation for domestic consumption, the Domestic Crude Supply Obligation (DCSO), is made available on first-line prioritised supply and what is left is used for honouring loan obligations and/or export market supplies.
With the body language thus far, NNPCL never believe that importation of refined fuel should ever stop or be brought to barest passable level and/or a day will come that crude will be refined in Nigeria? NNPC should never be seen to be midwifing refined PMS importations and, as a matter of fact, a deadline should be set for the stoppage of refined petroleum products into Nigeria.
The actions and inactions of NNPC have direct bearing on the forex market dynamics, the value of naira, the costs of living, purchasing powers of Nigerians and standards of living of over 200 million people living in Nigeria. This being the case the organisation and associated agencies need some close-marking, reorientation and serious touch-lighting to ensure that they prioritise the interests of Nigeria and Nigerians. Nigerians don’t need an atmosphere of energy supply chaos that only create opportunities for supernormal profiteering.
Ola Emmanuel is a business planning consultant
Post Views: 4
Follow The Eagle Online Channel on WhatsApp
