By turning its oil company, the Nigerian National Petroleum Corporation (NNPC), into a commercial entity, the federal government would be in line with the plans of other leading oil countries in the world to develop the sector and attract investors “from far and wide”.

Alhaji Muhammad Ngala, the chairman of the Borno State chapter of the Independent Petroleum Marketers Association of Nigeria (IPMAN), told RNI reporter Rukaiya Ahmed Alibe that some of the world’s leading oil countries had commercialised their oil companies and it had worked out well for them because of accountability, justice and transparency.

Ngala said one of the main reasons developed countries had decided to turn their oil companies into commercial entities was to attract foreign stakeholders to invest in the sector and they had succeeded.

However, he had doubts about whether Nigeria had developed enough to turn its oil sector into a commercial entity.

A major challenge was that not one of Nigeria’s refineries was working and neither were the 21 depots in the country, he said, adding that they had not worked for about 20 years.

He believed that the government should repair the refineries before it proposed turning the oil sector into a commercial entity, which could affect the population because the price of petrol and gas might skyrocket if it was not controlled.

He believed that if the repairs were undertaken and the NNPC was turned into a commercial entity it might achieve rapid growth. But it was important to ensure transparent management of the company. Corrupt, unjust and unaccountable managers needed to be rooted out.

Malam Muktar Goni, a resident of Maiduguri, opposed the government’s decision to commercialise the NNPC, saying many people would not be able to buy fuel because marketers could sell it at any price they wished.

Others believed that the opposite could happen because there would be more competition and the price might go down.

The federal government said that the state-owned NNPC would be turned into a limited liability company within the next six months.

A limited liability company is a business structure for private companies. It is one of the most common legal entities to form a business. All partners in a general partnership are responsible for the business and are subject to unlimited liability for business debts.

President Muhammadu Buhari signed the Petroleum Industry Bill (PIB) into law on Monday, August 16, after it had been passed by the National Assembly’s House of Representatives and the Senate in July.

Timipre Sylva, the Nigerian oil minister, made the disclosure at a press briefing on Tuesday, August 17.

The government began developing the bill nearly two decades ago, during which there was much deliberation and revision.

Sylva said a steering committee, which he would head, had been put in place to incorporate NNPC Limited.

Buhari was quoted as saying that his signing of the bill into the Petroleum Industry Act 2021 (PIA) marked the beginning of the journey towards a competitive and resilient petroleum industry that would attract investments to support the nation’s economic recovery and growth plan.

A statement from the presidency said the steering committee would “guide the effective and timely implementation of the PIA in the course of transition to the petroleum industry envisaged in the reform programme”.

KPMG Nigeria said the key objective of the PIA was to overhaul and transform the Nigerian oil and gas industry.

It said the oil and gas industry had a significant impact on Nigeria’s economy. Although the industry contributed less than 10% to the country’s gross domestic product, it contributed about 90% of the foreign exchange earnings and 60% of total income.