Amidst calls for the full removal of fuel subsidy, House of Representatives Speaker, Hon. Yakubu Dogara, has said it will be illegal now for the Federal Government to remove fuel subsidy without constituting a Price Control Board in line with the Price Control Act.
Dogara, who spoke yesterday in Abuja while receiving a delegation of the Independent Petroleum Marketers Association of Nigeria (IPMAN) that visited him, also described the perennial fuel shortage in the country as an embarrassment. He spoke just as Kaduna State Governor, Mallam Nasir el-Rufai, called for the scrapping of the Nigerian National Petroleum Corporation (NNPC).
The speaker said the Price Control Act, which provides for the regulation of prices of some consumer products, including petroleum products, was yet to be repealed. He added that for fuel subsidy removal to be effected, there must be a Price Control Board, which is the only body vested with the powers to remove petroleum products from the first schedule of the Act. According to him, the only alternative way petroleum subsidy could be removed is for the National Assembly to amend or repeal the Petroleum Control Act.
He said: “You talked about bringing this product at no cost to the government; that implies to me the removal of subsidy.
Now, I have had this discussion on so many platforms but as a legislator, I can tell you there is something about subsidy removal that we are not looking at. There is a Price Control Act; if you look at the Price Control Act, section 4 talks about regulating or controlling the prices of products that are listed in the first schedule of that Act. One of the products listed in the first schedule is petroleum products.
So, by law in this country, we must control the prices of petroleum products. “But the law as passed by the parliament gives a window and prescribes and vested the responsibility of adding up items on the schedule of the given items to the Price Regulating Board; and I am not sure we have that board in place.
So, for any discussion then to be meaningful, you have to put pressure on the executive. It is not the legislature’s work to constitute the board. “The board has to be put in place in line with the provisions of that law; so as soon as the board is constituted, the members of the board can remove petroleum products from the schedule of the act; in that way, subsidy is gone.
“But in the absence of that, the only other alternative is for the National Assembly to amend the Act removing petroleum products as one of the products in the schedule to the Act or repeal the Act altogether. These are the only two avenues by which subsidy can lawfully be removed. Any other way will be ultra vires in abolishing subsidy; that is the truth.”
He urged IPMAN to put pressure on the Federal Government to set up the Price Control Board so that discussions on the removal of subsidy could commence in earnest. On the controversial Petroleum Industry Bill (PIB), the speaker assured the delegation that as soon as the House resumes full legislative activities, it would step up efforts to complete work on the proposed law. The speaker also expressed concern that Nigeria, being an oil-producing country, is always experiencing fuel shortage.
“I don’t know if there is any country that produces the kind of oil that is produced in Nigeria that refines its products outside its own shores. For me, it is kind of illegal; this is most inexcusable because we have turned this nation into a laughing stock,” he added.
Earlier, the President of IPMAN, Mr. Chinedu Okoro, had said the association, in conjunction with partners from Peru, had concluded plans to inject a total of $4 billion into the construction of two refineries in the country.
He stated that the building of the refineries would reduce the incessant shortage of petroleum products. Okoro said the refineries would be located in Kogi and Bayelsa states. Also yesterday, Governor El-Rufai urged President Muhammadu Buhari to scrap the NNPC. He urged the president to create in place of the NNPC an independent company that would be capitalised and will work more transparently.
He also urged the Federal Government to “incentivise competent investors to acquire majority shares and management control in all our refineries and sell to them crude oil at market prices, and remit the proceeds directly into the Federation Account.” This, according to him, will end the circle of corruption in the oil and gas sector and help the nation profit more from its natural resources.
The governor described NNPC as a monster and a parallel government that consumes more than what the whole nation benefits from its resources. El-Rufai spoke on the topic “Nigeria and Oil Fortune” in Abuja at the Seventh Wole SoyinkaCentre Media Lecture Series. “No one is better qualified to do this than the person that birthed the NNPC through the merger of the NNOC and the Ministry of Petroleum in 1977 – President Buhari himself.
“No one can appreciate the gap between the vision of NNPC’s founding fathers, the beautiful baby of 1977 and the 38-year-old monster it has become better than President Buhari. “The NNPC of today must make Chief Sunday Awoniyi of blessed memory squirm in his grave. Something fundamentally decisive must be done to tame this monster.
“We must have the political will to make all oil industry transactions transparent. There should be clear rules and processes for licensing, concessioning, procurement and contracting. Opaque systems tend to be corrupt and it is time to shine the light,” the governor said. Besides the call for the scrapping of the NNPC, El-Rufai also sought the removal of fuel subsidy. He said: “The long and short of the situation of our oil industry is best exemplified by the parallel government called the NNPC.
In 2012, it sold N2.77 trillion of ‘domestic’ crude oil, but paid only N1.66 trillion to the Federation Account.
In 2013, it earned N2.66 trillion but paid N1.56 trillion to FAAC; in 2014, its oil sales were N2.64 trillion, but NNPC remitted N1.44 trillion, while between January and May 2015, it earned N733.36 billion and remitted only N473.2 billion! “That means that the NNPC only remitted about 58 per cent of the monies earned between 2012 and the first half of 2015.
A company with the audacity to retain 42 per cent of a country’s money has become a veritable parallel republic! “This country can no longer afford to maintain an NNPC that arrogantly, unlawfully and unconstitutionally spends an unhealthy proportion of national oil earnings on itself.”
Hours after Dogara outlined how to remove fuel subsidy, the president said his administration would handle the issue with care. He spoke after receiving briefing from the Ministry of Petroleum Resources, the NNPC and other agencies in the oil sector. Buhari said in a statement by Senior Special Assistant to the President on Media and Publicity, Mallam Garba Shehu, that he would carefully review all the submissions he had received on the need to remove fuel subsidy. “I have received many literatures on the need to remove subsidies, but much of it has no depth.
“When you touch the price of petroleum products that has the effect of triggering price rises on transportation, food and rents. That is for those who earn salaries, but there are many who are jobless and will be affected by it,” the president said. He also identified lack of security, sabotage, vandalism, corruption and mismanagement, not necessarily subsidy, as the most serious problems of Nigeria’s oil sector.
He promised to deal decisively with all the problems, saying: “We have to go back to the good old days of transparency and accountability.” Buhari directed the NNPC to review agreements for the swapping of crude oil for refined products with a view to injecting more honesty and transparency into the process to reduce costs.
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