In a recent session with the Senate Committee on Finance at the National Assembly complex, the Group Managing Director of the Nigeria National Petroleum Corporation Limited (NNPCL), Mele Kyari, announced that the company delivered an impressive N4.5 trillion to the federation account in October 2023.
During the session held on Wednesday, December 13, Kyari expressed his satisfaction in delivering substantial funds to the federation account, emphasizing the company’s commitment to transparency and the meticulous balancing of its financial records. He stated, “I am glad to inform you, Mr. Chairman and Distinguished Senators, that as of October, we were able to deliver N4.5 trillion into the federation account as a company to this country in 2023.”
Kyari highlighted the company’s efforts to align with transparency goals and adhere to financial regulations. This announcement comes amid recent concerns raised by the World Bank in its National Development Update report on December 13, which pointed out the lack of clarity and openness in certain aspects of Nigeria’s oil revenues.
The World Bank report specifically mentioned the increase in oil revenue since June 2023, labeled as “exchange rate gains” due to the depreciation of the Nigerian naira. However, it also highlighted the need for more transparency regarding other facets of oil revenues, including the financial benefits derived by the NNPCL from subsidy removal, ongoing deductions for subsidy arrears, and the overall impact on the Federation’s revenues.
One of the report’s focal points was the apparent disconnect between market changes and the retail prices of petrol since August 2023, prompting questions about the factors influencing pricing mechanisms and their transparency.
Responding to these concerns, Kyari assured the Senate Committee that the NNPCL, as a creation of the National Assembly, is committed to conducting business transparently, profitably, and in accordance with the law. He emphasized the company’s mandate to create value for shareholders, avoid financial losses, and continue to add value and pay dividends to shareholders.
Kyari also addressed concerns about market stability, stating that by the end of the first quarter of 2024 (Q1/2024), margins would begin to make more sense. He explained, “There is always a parallel market in every country. There is also an import and export window in every country, even in the developed world. But there is always a narrow gap between the two, and it takes time for you to have stability in this gap so that you have a low margin between the two for a sustained period, then businesses will thrive.”
In conclusion, the NNPC’s commitment to transparency and profitability, coupled with the assurance of narrowing margins by Q1/2024, aims to address concerns raised by the World Bank and instill confidence in the nation’s oil sector.