Reps Give New Order as NNPC Moves for Additional $2bn in Crude Oil-Backed Loans
- NNPC has been told to halt mortgage payments for Nigeria's future crude oil until it completes its mission
- The directive came from the House of Representatives Special Joint Committee looking into issues bordering on the petroleum sector
- This occurred after the lawmakers started looking into the purportedly dubious transaction last week
Legit.ng journalist Zainab Iwayemi has over 3 years of experience covering the Economy, Technology, and Capital Market.
The Nigerian National Petroleum Company Limited (NNPC) has been urged to stop the mortgage of Nigeria’s future crude oil until it concludes its assignment.
Source: UGC
The House of Representatives 'Special Joint Committee investigating factors working against the petroleum sector gave the directive, according to a Punch report.
This came as Ikenga Ugochinyere, the lawmaker representing Ideato South/Ideato North Federal Constituency, Imo state, which chaired the committee began investigations into the alleged shady deal last week
Legit.ng had reported that the NNPC intends to borrow additional $2bn in crude oil-backed loans from international creditors for the purpose of boosting financial inflow amid claims that the national oil company was struggling to pay international oil traders a backlog of $6bn amid subsidy removal.
What lawmakers are saying
In a statement released on Wednesday, Ugochinyere pleaded with NNPC not to undermine the House of Representatives' forensic investigation by granting another new loan.
If approved, he said the move would exacerbate the current state of affairs, starve refineries of feedstock, erode revenue generation, and allow future revenue to be wasted.
The statement reads,
“The citizens were excited by the recent news of President Bola Tinubu’s intervention for crude supply to local refineries in naira and the committee has received intel of plans to mortgage future crude revenue and oil for another loan at a time the nation is struggling.
“This is preemptive of the committee’s work and we want to announce the halt of this fresh move and for the state oil company to brief the parliament.
“The revenue being mortgaged is a sovereign wealth of the people and the parliament has a duty as the watchdog of the commonwealth to step in. The NNPC today is owned by the Federal Government and Nigerians, hence, its actions must not hurt their shareholders who we lawmakers represent.
He mentioned that the committee is currently looking into claims of not paying into the federation account and of not having crude available for domestic refineries.
The panel cautioned the oil business not to disregard the Federal Government's recent decision regarding the necessity of safeguarding nearby refineries.
The statement further read,
“We are calling on NNPCL to halt further plans to borrow more loan with crude oil, as the move will sabotage the President’s deal for domestic crude supply.
“In August 2023, following the removal of fuel subsidy and the unification of the forex market which significantly weakened the naira, the Federal Government through the NNPC secured a $3.3bn loan from Afreximbank to shore up liquidity in the market.
It further stated that Mele Kyari had previously clarified that the loan will be utilized to support the foreign exchange reserve and offer a more immediate fix for the nation's forex problems.
It added,
“The loan is said to be paid with crude oil set a $65 per barrel and had earmarked around 90,000 barrels of crude oil for the process. We are urging the NNPC not to undermine the forensic investigation by the House of Representatives into crude oil supply with another fresh loan, as the move is a threat to local refinery.”
Tinubu orders NNPC to sell crude oil to Dangote
Legit.ng reported that President Bola Tinubu had directed the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to Dangote Refinery and other upcoming refineries in Naira.
According to the presidency, the move was imperative to stabilise the pump price of refined fuel and the dollar-naira exchange rate.
The Federal Executive Council (FEC) adopted this decision, which would use Dangote Refinery as a pilot.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
