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“The issue is not about decision to pay or not. The issue is that the corporation is still bleeding as a result of challenges, including subsidies on petroleum products supplies that are not being replenished, making it very difficult for it to meet certain obligations. The truth, as we know in the federal ministry of finance as at today, is that NNPC’s cash flow warrants that we work with them till it is able to stand on its own as a business entity.

“One needs to understand the operations of the NNPC. One cannot be producing a product that costs N60 and be selling at N40, and would not bleed. It does not make sense. I know for a fact that the way NNPC is as at today, they do not have the cash flow to pay the debt.

“That was the immediate past minister of state for finance, Remi Babalola, responding to reporters inquiries last June at the height of the raging controversy about the Nigerian National Petroleum Corporation (NNPC)’s insolvency and its inability to pay the over N450 billion debt to the federation accounts.

Mr. Babalola was not talking as an ordinary folk in the street. Apart from occupying the second highest office in the ministry that superintends over all matter relating to the finances of the Federal Government, he was the chairman of the Federation Accounts Allocation Committee (FAAC).

Membership of the committee is composed of not only the representatives of all revenue agencies in the 36 states of the federation and the Federal Capital Territory (FCT), Abuja, but also their affiliates at the federal level, including the federal ministry of finance, Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS), Office of the Accountant General of the Federation (OAGF), Budget Office of the Federation (BOF), and the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).

Therefore, there was no doubt that he was talking from a position of strength, considering that the statistics and figures of the daily operations of the state-owned oil company was at his disposal.

NNPC’s group managing director, Austen Oniwon, was to later corroborate Mr. Babalola’s position in his response to a FAAC letter giving his management a final ultimatum to come up with a firm repayment schedule.

In the letter, Mr. Oniwon was unmistaken about the facts of the serious financial difficulties the NNPC was facing, which, he claimed, has not only incapacitated its ability to regularly pay for its daily domestic allocations, but affected its capacity to settle its fuel import bills.

“The corporation is insolvent, as its current liabilities exceeded its current assets by N754 billion, as at December 31, 2008”, he declared, insisting it would be able to pay the N450 billion owed the Federation Account only when the Federal Government has reimbursed the N1.156 trillion it reportedly spent on subsidy expenses incurred for petroleum products supplies and distribution since 2003.

Other outstanding claims in favour of the NNPC, he said, included expenditures on repairing/replacement of vandalized oil industry assets and attendant petroleum products losses; demurrage and cost of holding strategic reserves for petroleum products on behalf of the government; and financial difficulties as a result of disequilibrium between operational costs and actual cash-flow streams.

Mr. Oniwon is also supremely in a position to know the difference between the truth and fallacies about the health of the organisation he presides over. All the over 31 subsidiaries and affiliates of the corporation report directly to his desk on a daily basis, therefore, the truth should not be lost on him.

Are Mr. Babalola and Mr. Oniwon in some sort of games to shield the facts about the financial state of the NNPC? Well, it is difficult for discerning followers of the controversy to conjecture a guess from the blurring façade that mirror available facts.

But, the spontaneous reaction by ministers of information and finance, Dora Akunyili and Olusegun Aganga to the contrary, that the “NNPC is not insolvent, … as a going concern” only aggravated the confusion in the debate in search of the truth.

Who is right between Mr. Babalola and Mr. Oniwon on the one hand, and Mrs. Akunyili and Mr. Aganga on the other? Are there facts available to the latter that the former could not be availed with? Could it be that Mr. Babalola, FAAC, and the NNPC were in some kind of political games to deceive Nigerians on the state of health of the organisation that epitomizes the face and strength of the Nigerian economy? Are Mrs. Akunyili and Mr. Aganga playing the ostrich, by burying their heads in the sands and pretending to demonstrate patriotic flavor by shielding the country from the harsh reality of the truth?

If the NNPC is a flourishing going concern, why is it difficult for it to pay up its debts to the Federation Account? And why is the Federal Government keeping quiet in the face of the obvious constitutional travesty? If the NNPC has been exporting Nigeria’s crude, both during high tide and low price regimes at the international market, and the constitution demands that all earnings from such sales and other activities should first be transmitted into the consolidated revenue account, why is the government tolerating the obvious recalcitrance of the NNPC, by allowing it to withhold such funds for such a long spell of time? Is this loud silence and complacency by government part of the pretentious war against corruption?

Or could Mr. Babalola’s redeployment to the special duties ministry be the price for a sacrificial lamb who dared to speak a damning truth? Whatever are the answers to the above puzzles are only in the womb of time.