… want nation’s four refineries privatized
… query Petroleum Support Fund in no-subsidy regime
A consortium of civil society organizations has urged President Muhammadu Buhari and the Minister of State for Petroleum Resources to make an official pronouncement on the removal of subsidy on petroleum products in the country.
The CSOs also called for the privatization of the country’s four refineries in their present condition to avoid further revenue losses.
Persecondnews recalls that on April 8, 2020, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam MeleKyari, had announced the subsidy removal “with immediate effect’’.
Consequently, the Minister of State for Petroleum Resources announced government’s adoption of a modulation mechanism to regulate petroleum products prices, dictated and moderated by the interplay of market forces.
The pump price of Premium Motor Spirit (PMS) also known as petrol was reduced from N145 per litre to N125 per litre.
The CSOs said following their virtual meeting held to enable them appraise the effects of recent events and the implications of COVID-19 on the Nigerian petroleum industry it becomes imperative for the government to follow through its policy measures to optimize available revenues.
In a statement on Thursday, they noted that Coronavirus and the resultant global economic downturn as a result of low crude oil prices had put Nigeria under “immense fiscal pressure’’.
They lauded the initiative of the Federal Government on the reviews of 2020 budget benchmarks and slicing the Appropriation Act by N1.5 trillion as well as the proposal to remove subsidy.
The CSOs said: “We entreat the government to lay out defined processes and regulatory guidelines to support the announced removal of fuel subsidy. These should be pushed forward and announced by the Presidency and the Minister of Petroleum Resources to give the policy an official seal of affirmation to all Nigerians that we are not in another false expedition.
“We call on the Federal Government to commit to the sustainability of the no-subsidy regime by entreating it in law, either through a stand-alone legislation, or through appropriate clauses integrated into the Petroleum Industry Bill (PIB) will allow for the sustainability of the no-subsidy regime.
“We require the government to clarify the role of the Petroleum Support Fund in the new no-subsidy regime. Clarity is required about how that fund is being managed, whether the over-recovery sums were deposited there and how they are expected to be spent.
“As a matter of urgent national importance, we strongly support the call for the privatization of the country’s four refineries in their present condition to avoid further revenue losses. We suggest the adoption of a transparent merit based model for privatization either considering the NLNG for part privatization or an outright sale.
“We encourage the government to adopt favorable fiscal terms that bring about a renewed investors’ confidence and also help fast track the proposed 29+ refineries which still have valid operating licenses.
“We encourage the government to transit the PPPRA and PEF into new roles to ensure the sustainability of the proposed ‘non-subsidy policy’. Repeal of the PPPRA and PEF (M)B Act and transition them into efficient and competent institutions to support the reforms encapsulated in the proposed PIB are possible options to consider.’’
On post-price regulation era, the CSOs advised the government to prioritise consumer protection so that when the downstream sector of the petroleum industry is liberalized, the interests of the people would not suffer exploitation in the hands of profiteering marketers.
“We suggest anti-trust or competition propositions using the Federal Competition and Consumer Protection Act 2019. We encourage the government to consider providing varied options for Nigerians in terms of transportation systems in the country when inevitably, increases in price of crude oil increases result in the rise of the price of refined petroleum products.
“We suggest that the NNPC as the National Oil Company should not be given any advantage, whether comparative or competitive, over other petroleum products marketers in terms of access to foreign exchange to handle their importation of products activities to create a level playing field for all players.
“If the NNPC must remain a player in the market, it must strive to operate under the same conditions and rules as other players in the sector regulated only by the prevailing market forces and competition.
“While we await the conclusion of work on the PIB, we urge the government to take steps to delineate the roles of policy formulation, regulation and enforcement as well as operation in the industry.
“We suggest policy directions should be left under the purview of the Minister of Petroleum Resources, with the Presidency and Minister of Petroleum Resources and Minister of State for Petroleum Resources lending their support to the declarationsby the GMD of NNPC to give weight and establish trust between the government and the people.
The CSOs comprise Civil Society Legislative Advocacy Centre (Cislac), Budgit, Spaces For Change (S4c), Youth Forum Of Extractive Industry Transparency Initiative (Eiti), Centre For The Study Of The Economies Of Africa (Csea), Nigeria Natural Resource Charter (Nnrc), Media Initiative For Transparency In Extractive Industries (Mitei), and Orderpaper Advocacy Initiative.
Others which signed the statement made available to Persecondnews are Women In Extractives (Wie), Connected Development (Code), Africa Network For Environment And Economic Justice (Aneej), Centre For Transparency Advocacy (Cta), Koyenum Immalah Foundation (Kif) and African Centre For Leadership Strategy And Development (Centrelsd).
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