Suraj Oyewale: PIB, deregulation and Nigeria’s non-reading activists (Y! FrontPage)

by Suraj Oyewale

Oil-and-gas

 

So when the PIB finally becomes an Act and, in implementing the provisions, fuel subsidy is totally removed, I hope some people will not just wake up from their slumber and begin another round of street protests, when during the public hearings on the Bill, nobody deemed it fit to bring up the issue.

 

Someone once said, and many people agree with him, that “if you want to hide something from the Blacks, put it in a book”. A contradiction in the clamour by Nigerian activists for the passage of the Petroleum Industry Bill (PIB) and the stand by the same set of people against deregulation of the downstream sector of Nigeria’s petroleum industry may yet again be proving this.

It is common knowledge that many Nigerian activists do not support the recurring attempt by successive governments to deregulate the downstream oil sector. The argument has been on for more than two decades and the popular opinion remains the Federal Government should continue to subsidize fuel products. The latest attempt by the Goodluck Jonathan government to remove the subsidy in January 2012 met brick walls, with casualties recorded in the street protests. That is how strong the anti-deregulation, pro-subsidy campaign is.

At the same time, I have heard many anti-deregulation activists call for the passage of the PIB as it is, or in some cases, with the caveat that the powers of the Petroleum Minister as contained in the current draft be whittled down before the passage. In fact, it appears that call for the passage of the PIB is the fad among Nigerian activists now.

But I wonder how many of the callers for the passage of the PIB have read the bill. As an accountant in the oil and gas industry, I have had the privilege of dissecting the current draft of the PIB and Part 1 (Objectives), Section 1(f) of the Bill conspicuously listed “ (to) deregulate and liberalize the downstream petroleum sector” as part of the objectives of the legislation.

How will this be achieved?

Part V (Downstream petroleum), section 221 provides the methodology:

The pricing of petroleum products in the downstream product sector is deregulated to ensure:

a)      A market related pricing;

b)      Adequate supply of product;

c)       Removal of economic distortions; and

d)      The creation of market value for petroleum products in the Nigeria economy

Of course subsidy is the principal economic distortion in the current regulated regime.

What this means is that, once the Petroleum Industry Act comes on stream, the downstream sector will be deregulated. The Bill however puts price monitoring mechanisms in place.

Section 226 that covers this is reproduced below:

  1. The Agency (DPRA) shall monitor:

a)      The prices of petroleum products applying in the domestic market to ensure that there is no pricing collusion or manipulation; and

b)      Any activity of any operator in the downstream petroleum sector that, in the opinion of the Agency, is likely to adversely affect the prices of petroleum products

The principal concerns various interest groups have raised in the PIB as of now are the Host Community Fund which has pitted the oil producing regions against some legislators, especially from the North; the powers of the Minister; the interests of the International Oil Companies; and the gas flaring provisions. I have not seen the usual anti-deregulation advocates express reservation over the plan to eventually bring into force the long attempted deregulation through the PIB. Except these otherwise vocal advocates are satisfied with the price monitoring system the PIB proposes, then I can only take the silence over the this key objective of PIB as meaning they have not read that part of the PIB before calling for its passage.

So when the PIB finally becomes an Act and, in implementing the provisions, fuel subsidy is totally removed, I hope some people will not just wake up from their slumber and begin another round of street protests, when during the public hearings on the Bill, nobody deemed it fit to bring up the issue.

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Suraj  Oyewale, a chartered accountant, blogger and public analyst, is the founder of JarusHub Career & Management Portal.

 

 Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.

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