Monday, 13 June 2011
Nigerian economy grappling with cash flow
The Pipeline Petroleum Marketing Co, which is Nigerian National Petroleum Corporation's (NNPC) refined products import and export subsidiary, is now indebted to the tune of US$6 billion and virtually cut off from bank credit lines. With the funding debt on modified carry arrangements standing at US$6 billion and arrears on other payments to the oil industry in the region of US$10 billion, NNPC is now effectively insolvent. The country remains supplied with products through offshore processing deals in which crude is exchanged for refined products including gasoline and diesel.
The excess crude account, which is the Federal Government's reserve, is currently only holding about US$6 billion.
The future of the Petroleum Industry Bill (PIB) 2011, which failed to clear before the end of the legislative term on 7th June, now depends on the stance of the Committee of the Whole in the House of Representatives and the Committee of the Whole in the Senate. The committees, which represent all the members, will be formed after the new legislative session which begins on 28th June. They are usually chaired by the deputy speaker or the Senate's deputy president but can be chaired by the speaker or the Senate.
Momentum behind the PIB was lost following the unsuccessful attempt of the immediate past session of the House of Representatives to pass the PIB before the end of its just concluded tenure. Both the Presidency and the Senate have not made any attempts towards seeing through the conclusion of the consideration and passage of the bill and much will depends on ministerial policy.
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