Repeal laws creating PPPRA, PEF, clarify PSF role, CSOs tell FG

FG spends N8.9t on subsidy in 10 years — PPPRABy Michael Eboh

A consortium of Civil Society Organizations, CSO, Thursday, called on the Federal Government to immediately repeal the laws establishing the Petroleum Equalization Fund, PEF, and the Petroleum Products Pricing and Regulatory Agency, PPPRA, and explain the role of the Petroleum Support Fund, PSF, to show that it is really committed to its policy on full deregulation of the downstream petroleum sector.

In a statement signed on their behalf by Ms. Tengi George-Ikoli, Programme Coordinator of the Nigeria Natural Resource Charter, NNRC, the CSOs also advised the Federal Government to give the deregulation drive a legal backing, by enacting an appropriate legislation or embedding it as part of the Petroleum Industry Bill (PIB) expected to be submitted to the National Assembly soon.

The consortium, which took the positions at the end of a webinar, on the President and the Minister of Petroleum Resources to demonstrate his honest commitment to the deregulation efforts by expunging the laws that entrench the potential of returning to a subsidy regime and pre-deregulation state.

The group said: “The government should repeal the PPPRA Act, the PEF(M)B Act and the Price Control Act specifically, section 6(1) of the Petroleum Act, Schedule 1 of the Price Control Act, all acts that ensure a potential of returning to a price fixing regime and demonstrate to the Nigerian people that the declaration of full deregulation is merely a statement of intent and not yet honored.”

According to the consortium, there is need for the Federal Government to commit to the sustainability of the deregulation regime by entreating it in law, either through a stand-alone legislation, or through appropriate clauses integrated into the PIB, as this would allow for the sustainability of the no-subsidy regime.

“While we await appropriate legislation, we require the government to clarify the role of the Petroleum Support Fund, PSF, in the new deregulation 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,” they demanded.

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It also urged the Ministry of Petroleum Resources to back up its deregulation policy statement by empowering appropriate agencies including the Federal Competition and Consumer Protection Council to take over the consumer protection interests of Nigerians that may be adversely taken advantage of in a deregulated downstream sector to protect the interests of the people would not suffer exploitation in the hands of profiteering marketers.

On the issue of ameliorating the immediate effects of the removal of petrol subsidy, the group said the “Government should channel the revenues used for subsidy to improve the lives of its originally intended beneficiaries, which are impoverished Nigerians and not the rich, by investing in enablers of economic growth and development such as development of rural roads, education, health services and agriculture.”

They also asked the relevant authorities, especially the Central Bank of Nigeria,  CBN, to ensure a level-playing field for all importers of Premium Motor Spirit and not place the Nigeria National Petroleum Corporation, NNPC, at an advantage over others.

The CSOs called on the NNPC to take urgent practical steps to reverse the fortunes of the loss-making refineries as revealed in its published 2018 Audited Reports of its subsidiaries, noting that the refineries remain cost centers that the Nigerian government can ill afford, given the impact of COVID-19 pandemic and other fiscal pressures on its economy.

They said: “The Nigerian government should create an enabling environment for the private sector to contribute to the efficient running of the refineries so that Nigerian can reach its domestic refining goals.

“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 commending the government for providing initial regulation to support the deregulation efforts in June 2020, the CSOs noted that the government’s engagement with the public on the effects of the deregulation left a lot to be desired.

They encouraged the government to ramp up its engagements with the public to improve their awareness and understanding of the deregulation process and all it portends for the Nigerian people.”

The consortium, formed in April 2020 and spearheaded by the Nigeria Natural Resource Charter (NNRC) is comprised of the following civil society organizations: Civil Society Legislative Advocacy Centre (CISLAC), BudgIT, Connected Development (CODE), Media Initiative for Transparency in Extractive Industries (MITEI), OrderPaper Advocacy Initiative, Women in Extractives (WiE), and Extractive 360.

Others are Centre for the Study of the Economies of Africa (CSEA), Youth Forum on Extractive Industry Transparency Initiative (Youth Forum on EITI), Publish What You Pay (PWYP), Africa Network for Environment and Economic Justice (ANEEJ), African Centre for Leadership Strategy and Development (CentreLSD), Centre for Development Support Initiatives (CEDSI), Centre for Transparency Advocacy (CTA) and Koyenum Immalah Foundation (KIF).


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