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Buhari unveils NNPC Limited, agency halts FAAC remittances



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The Nigerian National Petroleum Company Limited on Tuesday made it clear that it would no longer remit any money to the Federation Accounts Allocation Committee for sharing to the three tiers of government monthly.

It said this was based on its latest transition from a public corporation to a limited liability company and that it currently owed no money to FAAC, as all monetary arrears to the committee were owed by the old corporation and not the new oil company.

This came as the President, Major General Muhammadu Buhari (retd.), officially unveiled the NNPC Limited on Tuesday and declared that the new entity was henceforth free from institutional regulations.

Buhari, who made this public at the Presidential Villa, Abuja, stated that the oil firm would from now on conduct itself under best international business practice.

Before its official unveiling as a limited company, the NNPC had failed to make any remittance to FAAC since this year. It had consistently deducted the amount it spends on fuel subsidy monthly, a development that had eroded the funds which it would have remitted to the committee.

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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.

Speaking to journalists on the sidelines of the unveiling of the new oil company, the Chief Executive Officer, NNPC Limited, Mele Kyari, stated that the firm was now a private outfit and had nothing to do with FAAC anymore.

Responding to a question on what would happen to NNPC’s monthly FAAC contributions, kyari replied, “We are now a private company; would MTN go to FAAC?”

When probed further to tell if there would be no more FAAC remittances from the company going forward, he said, “We will pay our taxes, royalties and deliver dividends to our shareholders.”

Asked about the arrears to FAAC that were not delivered by the firm over the years, the CEO said, “Which arrears? That’s Nigerian National Petroleum Corporation.”

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What NNPC transition implies

The NNPC explained some of the changes that had taken place or would happen based on the transition of the firm from a corporation to a limited company.

Kyari said, “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.

“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.”

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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.”

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