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NNPCL Board Approves Dollar Revenue Transfer To CBN

Published

11 months ago

Feb 9, 2024.

EKO HOT BLOG reports that the Central Bank of Nigeria has created a department to deal with crude oil sales transactions by the Nigerian National Petroleum Company Limited, the Group Chief Executive Officer, NNPCL, Mele Kyari, announced on Thursday.

Kyari also revealed that the Board of Directors of NNPCL had approved the decision to move significant portions of the company’s revenues to the apex bank.

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This came as the national oil major declared that there was no imminent hike in the pump price of Premium Motor Spirit, popularly called petrol. NNPCL is the sole importer of petrol into Nigeria, a role it has shouldered for several years.

In January, it was reported that President Bola Tinubu had directed the CBN to assume the responsibility for crude oil sales proceeds from the NNPCL. Consequently, NNPCL is expected to submit the receipts for crude oil sales to CBN for vetting and documentation.

In a video made available to journalists in Abuja on the meeting between CBN delegation, led by the bank’s Governor, Olayemi Cardoso, and the management of NNPCL at the latter’s headquarters, Kyari welcomed the decision to move the oil firm’s transactions to CBN.

He said, “We welcome the governor of the CBN and his senior management team to NNPC Ltd. We understand very clearly that this review of our decision to move significant portions of our revenues to the CBN is very timely.

“We made that decision in line with the directives of our Board of Directors to maintain safe obligor limits with commercial banks. And for us to do this, we do need additional support, particularly from the CBN to achieve this.

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“We are a very huge company, our transaction and liquidity levels are very high, and perhaps we are the largest business in this country. We are also happy that the CBN has created a robust digital platform for our transactions.”

“It has created a department that will deal with NNPC issues and will create no hindrance to our operations. We will continue to collaborate with the CBN to ensure that further improvements are received so that this relationship serves the best interest of our company and, of course, our country.”

On his part, Cardoso said the CBN had restructured its internal processes to be capable of taking on the enormous responsibility that would be placed on the bank by the national oil company.

He said, “We have come to this particular stage where the NNPC has made the decision to move a respectable part of its business to the CBN.

“I also want to say that we have restructured and strengthened our internal processes such that we will be very capable of taking on this enormous responsibility that will be placed in the central bank.

“We are looking forward to further collaboration with NNPC and I have absolutely no doubt in my mind that this effective collaboration will work in the best interest of NNPC and Nigeria in general.”

The decision to move NNPCL’s oil sales transactions to CBN elicited diverse reactions last week, as some persons commended the move, while others kicked against it.

The 2023 presidential candidate of the Peoples Democratic Party, Atiku Abubakar, for instance, said the Federal Government’s directive to CBN to take over the responsibility for crude oil sales proceeds from NNPCL was illegal.

According to him, Tinubu’s directive undermined the operational independence of the national oil company.

“Without prejudice to the possibility of any good that was intended in the decision of the Federal Government to make the CBN take over the responsibility for crude oil sales proceeds from NNPCL, it must be clearly stated that the action is not legal in its application,” Atiku had stated in a statement.

The former Vice President, who noted that little had been communicated to the public about explaining details of the decision, declared that “whatever may be the merit of the new arrangement, the presidential directive is a violation of the legal status of the NNPCL.”

Atiku stated, “It is an arbitrary order capable of undermining the operational independence of the NNPCL. By this order, Mr President has wrested control of the finances of NNPCL and donated the same to the Federal Ministry of Finance and CBN.