Photo: Leadership

Oil refinery

For a loan deal the federal lawmakers described as "illegal," the House of Representatives yesterday ordered the Nigerian National Petroleum Corporation (NNPC) to stop further action on the contentious $1.5 billion syndicated credit obtained by the state oil company to reportedly pay off accumulated debts for petrol already supplied by foreign importers.

The $1.5 billion loan freeze is expected to last until the outcome of the House-sanctioned probe into the covert loan.

The resolution was sequel to a motion sponsored by Ralph Nnanna Igbokwe (Imo/PDP), on the loan deal. Igbokwe said the NNPC had many questions to answer on the circumstances of the loan.

House Speaker, Aminu Waziri Tambuwal, detailed the standing Committees on Loans and Debt, Justice, Petroleum Resources Downstream and Upstream to investigate the loan deal and report to the House within 14 days.

Meanwhile, NNPC's Group Managing Director, Mr. Andrew Yakubu, is expected to appear before the House Committee on Petroleum Resources (Upstream) to explain the $1.5 billion loan, the committee's chairman, Muraina Ajibola, disclosed at yesterday's plenary. Ajibola said the committee had summoned the NNPC GMD via a letter dated January 11.

In a monitored report, the NNPC insisted that the $1.5billion loan was purely a "commercial decision" taken by the corporation to pay off accumulated debts for petrol already supplied by foreign importers and to save Nigeria's credit rating in the international markets.

International news agency, Reuters, which broke the news on the loan deal, said it was struck towards the end of last year.

The loan, provided by several Nigerian and international banks, was brokered by Standard Chartered Bank.

The NNPC pledged 15, 000 barrels of crude per day as collateral with an agreement to pay the loan back in five and a half years.

The NNPC is believed to owe foreign commodity traders over $4 billion for petroleum products supplied over the years.

The National Assembly had on December 13, 2012, approved a N161billion supplementary budget requested by President Goodluck Jonathan, to settle fuel subsidy payments for the remaining part of the year to ensure steady fuel supply during the yuletide.