President Muhammadu Buhari on the 19th of September 2021 directed the formal incorporation of Nigeria National Petroleum Company (NNPC) Limited and has also appointed its board of directors and management. This is in consonance with Section 53(1) of the Petroleum Industry Act 2021, which requires the Minister of Petroleum Resources to cause for the incorporation of the NNPC Limited within six months of commencement of the Act, in consultation with the Minister of Finance on the nominal shares of the Company. Following the signing of Petroleum Industry Act into law, Mr Mele Kyari Group Managing Director of NNPC had said that the national petroleum firm would cease to exist in six months. Mr Kyari also said that NNPC would be transformed into a private company and would be incorporated under the Company Allied Matters Act (CAMA)
Mr Mele Kolo Kyari, the NNPC’s Group Managing Director, has been asked to take the required actions to ensure that the NNPC Limited’s incorporation complies with the PIA 2021’s provisions. The Administrative Structure includes the chairman of the board who is Senator Ifeanyi Araraume, while Mele Kolo Kyari and Umar I. Ajiya are Chief Executive Officer, and Chief Financial Officer, respectively. Other Board Members are; Dr Tajudeen Umar (North East), Mrs Lami O. Ahmed (North Central), Mallam Mohammed Lawal (North West), Senator Margaret Chuba Okadigbo (South East), Barrister Constance Harry Marshal (South South), and Chief Pius Akinyelure (South West). The incorporation of NNPC Limited will run as a commercial entity while the federation will still own all the shares.
It’s pertinent to note that the signing of the Petroleum Industry Act into law has restructured the oil and gas industry in Nigeria, as this development brings an end of the NNPC as we have come to know it (regulatory body). NNPC Limited coming to existence creates a platform for competition in the industry, as it’s a step towards a fully deregulated downstream oil sector henceforth leaving market forces and private oil and gas entities to have a free hand in their operational activities. Regular Nigerians also being able to buy shares in NNPC LTD gives the final consumer a chance to be a part of the sector and to profit from it’s gains. In the not too distant future these steps will definitely lead to price increase of Petroleum Products AGO PMS DPK because with a fully deregulated downstream oil sector the International pricing system will take forefront with no form of subsidy expenses, this stresses the importance of fully operational refineries in the country in order to avoid the impending hardship that will arise from price increase.
Source: Oriental news, Sun news online, Punch.
