There are fresh doubts over the federal government’s claim of full deregulation of the downstream segment of the petroleum industry with the latest admission by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, that the Petroleum Equalization Fund (PEF) was still an active component of the industry.
Kyari made the statement in response to a question on Channels TV on Wednesday night regarding the relevance of the PEF in light of the government’s deregulation policy.
The PEF, established by Decree No. 9 of 1975 and amended by Decree No. 35 of 1989, is saddled with the responsibility of reimbursing petroleum marketers losses incurred by them in order to sell petroleum products at uniform prices across the country. It is a form of subsidy.
With the recent removal of subsidy by the federal government and subsequent claim of implementation of full deregulation of the downstream sector, some Nigerians have questioned the practicability of the policy given the continued existence of bodies by PEF empowered by law to provide subsidies, as well as the Petroleum Products Pricing Regulatory Agency (PPPRA) which regulates pricing of the products.
Kyari tied the fate of the PEF to the Petroleum Industry Bill (PIB) which has defied countless efforts at conclusive legislative attention spanning different assemblies.
It remains to be seen how the PEF, which has been bogged down by massive corruption allegations, will become a thing of the past given the complicated legal and structural issues, and even commercial and regional interests, at play.
Defending government’s latest move, the NNPC chief said:
“And not only that, every corruption that you are aware of in the downstream industry is one way or the other connected to fuel subsidy.
“It is very understandable for people to be angry that the price of fuel has gone up because it affects the prices of every other commodity. But when prices go up, the other natural thing that must happen is that your income needs to increase so that you are able to procure the things that are now delivered at higher prices.
“You can’t do this anywhere in the world if there is no productivity and there will be no productivity except there is growth in infrastructural development, industries are able to work and therefore, there is a connection between production and consumption.”
- BREAKING: 97 new cases of COVID-19 take Nigeria’s total to 57,242; death toll now 1,098 - September 20, 2020
- Trickytee, Ozo evicted from #BBNaija - September 20, 2020
- Ize-Iyamu thanks supporters, to unveil next plan - September 20, 2020