Why NNPC board was dissolved

Only a few undiscerning Nigerians and foreigners would have been surprised  by the dissolution,yesterday,of the board of the    Nigerian National Petroleum Corporation (NNPC) by President Muhammadu Buhari.

For as long as anyone can remember,the organization has  been stumbling from one corruption scandal  to the other,the latest  being the 2013 allegation by the immediate past Governor of the Central bank of Nigeria (CBN) and now the Emir of Kano,Alhaji Muhammadu Lamido Sasusi ,that the NNPC failed to remit  up to $20 billion to the federation account.

The allegation was to cost him his job at the apex bank even after forensic auditors appointed by the immediate past administration said only $1.4billion should be remitted by the  firm.

The NNPC   was established on April 1, 1977 following the merger of the  then Nigerian National Oil Corporation and the Federal Ministry of Mines and Steel with sole responsibility for upstream and downstream developments.

It is also charged with regulating and supervising the oil industry on behalf of the Federal Government.

Eleven years after   the birth of the NNPC  it was  commercialized into 11 strategic business units, covering the entire spectrum of oil industry operations: exploration and production, gas development, refining, distribution, petrochemicals, engineering, and commercial investments.

It manages the joint ventures between the federal government and such foreign multinational corporations like Royal Dutch Shell, Agip, ExxonMobil, Chevron, and Texaco (now merged with Chevron).

Through collaboration with these companies, the Nigerian government conducts petroleum exploration and production.

The oil companies appropriate portions of their revenue which is nearly 60% of the revenue generated by the oil industry in this manner, to the government.

With oil as Nigeria’s largest revenue earner, cash flow from the NNPC accounts for 76% of federal government revenue and 40% of the entire country’s GDP.

But in reality, the corporation and many of its subsidiaries have failed in living up to their responsibilities.

Its refineries hardly work with the result that Nigeria relies more on imported fuel.

Thus, scarce foreign exchange is wasted on importing fuel while billions of naira is also paid as ‘subsidy’ to importers.

This mode of business has since been found to be  a huge racket  on the nation.