‘PIB Restricts Petroleum Products Import To Refinery Owners’
The Senate’s decision to award just three per cent to oil-bearing communities may not be the only controversial clause in the Petroleum Industry Bill (PIB) as a closer check has shown that the Upper Chamber also provided that petroleum products can only be imported by refinery owners in Nigeria.
While the bill expectedly removed price controls on petroleum products in Section 205, the Senate version of the bill has a clause that constrains market competition by restricting the importation of products to only players with local refining capacity.
This clearly counters the provision of 205(1), “Subject to the provisions of this Section, from the effective date, wholesale and retail prices of petroleum products shall be based on unrestricted free-market pricing conditions.”
The inserted Section 317 (8) in the Senate bill states, “(1) The Authority shall apply the Backward Integration Policy in the downstream petroleum sector to encourage investment in local refining.
“(2) To support this, licence to import any product shortfalls shall be assigned only to companies with active local refining licences.
“(3) Import volume to be allocated between participants based on their respective production in the preceding quarter.
“(4) Such import to be done under NNPC Limited Direct Sale/Direct Purchase (DSDP) scheme.
“(5) To safeguard the health of Nigerians, imported petroleum products shall conform to the Afri-5 specification (50ppm sulphur) as per the ECOWAS declaration of February, 2020 on adoption of the Afri-Fuels Roadmap”.
The decision by the Senate to impose restrictions on what is supposed to be a deregulated downstream sector of the petroleum industry raised eyebrows among experts who called for the provisions to be expunged.
When contacted, yesterday, energy expert and former President of the Society of Petroleum Engineers (Nigerian Council), Engr. Joseph Nwakwue, expressed concern that the provisions will create a duopoly in a price deregulated environment thereby destroying the Nigerian downstream industry as we know it today.
According to him, “It restricts importation of all petroleum products, including PMS, diesel, aviation fuel, lubricants, and base oil – products which are already deregulated, to only players with local refining capacity.
“In the near term, only the NNPC and Dangote will have domestic refining capacity for PMS for instance, so, they will be the only importers. This takes the industry back and could not have been the intention of the bill.
“Moving from a state-owned monopoly in a price regulated market to a duopoly in a price deregulated market is not what Nigeria needs now as it takes the industry backward and exposes Nigerians to exploitation and further hardship. This, in my humble view, is not reformatory”.
He pointed out that “rather than seek to protect refiners, we should rather seek to protect the consumers by liberalizing and expanding petroleum product supply sources. That is the only way prices will be ‘market-determined’ and consumers made to pay fair value for the products they buy.
“The viability of local refining is not determined or enhanced by locking out competition, it is rather achieved through price deregulation which has been done in Section 205.
“This clause gives statutory unfair advantage to private players rather than through market competition.
“Indeed, the law and the authorities have an obligation to protect the market (other players including Nigerian entrepreneurs) and the consumers rather than to encourage monopoly/duopoly by locking out competition.
“This clause does not create a level playing field for all players in the sector, and can, indeed, destroy existing Nigerian businesses that engage in importation of other petroleum products like diesel, LPG, Aviation fuel etc. with attendant loss of jobs and more economic misery for Nigeria and Nigerians”, he added.
Nwankwue pointed out that governments all over the world “do not create and encourage monopolies or duopolies and that is why anti-trust laws are enacted and enforced to protect industries and consumers.
“Nigeria should not be doing the reverse. A case can always be made about protectionist policies for nascent or pioneer industries, but this is not the case with a long-established, once-thriving Nigerian downstream.
“This clause needs to be expunged from the PIB. The downstream regulator – Authority should be left to develop regulations that are fair, inclusive and transparent for petroleum product importation that ensures open and diverse market supply and hence competition, only then would the objectives of the bill be achieved.
“It is worth repeating that as price control is being removed, supply must be competitive, inclusive, transparent and seen to encourage efficiency. Then, and only then will Nigerians and Nigerian win”, he added.
Also in his remarks, energy expert, Ademola Adigun, said the provision was clearly put in place to favour certain players in the industry.
According to him, “It is a clause designed to give an advantage to Dangote. It’s not a fair clause based on current realities and is capable of creating an oligopoly in the market.
“It’s very unfair and seems inserted to please a certain group”, he added.
Also, a document detailing industry players’ position on the PIB stated this about the section, “A licensing regime for importation be included in Section 174 and the conditions for licensing be open and transparent, ensuring free-market competition and a level playing field for all parties. This will enhance market efficiencies”.
The Senate and the House of Representatives had, last Thursday, set-up conference committees to harmonise both versions of the PIB.
The committees are expected to meet, today.
The harmonized version is also expected to be passed by both chambers before the National Assembly proceeds on its annual break on Thursday.
We’ll Expand Socio-Economic Opportunities For All Rivers People -Fubara ……As Wike Bows Out
Rivers State Governor, Sir Siminalayi Fubara, has declared his administration’s resolve to expand the existing socio-economic opportunities in order to engender prosperity for all Rivers people.
Fubara made this declaration on Monday at the General Yakubu Gowon Stadium, Elekahia, venue of his swearing-in as the sixth democratically elected governor of Rivers State.
Chief Judge of Rivers State, Justice Simeon Amadi, administered the oath of office on the new governor and his deputy, Prof. Ngozi Odu.
Thereafter, the former governor, Chief Nyesom Wike, handed over the flag of Rivers State and handover notes to his successor.
Fubara, in his inaugural address titled “Together, Let’s Consolidate the New Rivers State”, noted the poor state of the national economy, but promised that his administration would take measures to diversify Rivers economy and insulate it so that it can grow.
He also assured of promoting the climate of ease of doing business in the State to attract direct foreign investment capable of empowering Rivers people.
“The primary responsibility of a new government is to do its best to advance the security and well-being of the State and its citizens.
“Therefore, as we undertake our responsibilities, we promise to stay the course, commit to cooperative governance and expand opportunities for everyone. The wishes of our people for a happy life are our mission in politics.
“We will prioritise the well-being of the State and citizens with a renewed focus on economic growth, people-centred projects and social services”, he said.
He said further that, “We will improve the ease of doing business and sustain a congenial fiscal regime to attract local and foreign direct investments to stimulate greater economic activities, create wealth and improve citizens’ livelihoods.
“We will adopt a re-industrialization policy master plan and partner with the private sector to revive or establish viable industries to create jobs and empower our people.
“We will also support the growth of small businesses and encourage commercial agriculture to achieve food security, industrialization and improved living standards for citizens.”
Fubara added that his administration is already building on the successes of his predecessor and will construct more projects including the Port Harcourt ring road.
According to him, there shall be healthy partnership with private investors to provide integrated inter-modular public transportation system in the State.
“We witnessed unprecedented growth in infrastructure in the last eight years, but there’s still more to do.
“We will follow our leader’s footsteps to invest in capital projects, including roads, bridges, electricity supply to our rural areas, and social housing.
“We will, therefore, partner with the private sector to develop an integrated multimodal public transportation system to advance mass mobility and access to socio-economic opportunities across the state.
“We will also construct the Port Harcourt Ring Road to enhance the mobility of goods and services across the State”.
Fubara said the challenges in the health sector like inadequate manpower and corruption would be addressed to achieve optimal performance.
In the education sector, he promised to provide smart classrooms for students to prepare for global competition, empower the youths with skills to become economically active while being connected to small and medium scale business opportunities.
He said, “We care about our youth. We know they need jobs, opportunities, empowerment and the freedom to build sound, promising futures. We will not abandon our youth to their fate. We will continue prioritizing education at all levels and empower our youth with the relevant skills and opportunities to become economically active, productive and prosperous.
“We believe in the job creation capacity of small and medium enterprises. And so, we shall facilitate targeted access to low-interest funds for youth entrepreneurs to start or improve their businesses, earn decent incomes and generate employment for themselves and others.”
The governor particularly acknowledged the achievements of his predecessor in the health sector saying, “We are also proud of the state’s achievements in the healthcare sector, particularly the construction of new primary healthcare centres, the Mother and Child Hospital, the Rivers State University Teaching Hospital, the Dr. Peter Odili Cancer and Cardiovascular Diseases Diagnostic and Treatment Centre and the contributory Healthcare Insurance Law.
“With what is on the ground, it is evident that the primary challenges with our healthcare system are more with inadequate manpower, corruption, indiscipline and ineffective management”.
Fubara gave a firm assurance by saying: “I assure you that apart from completing all ongoing healthcare infrastructure projects, we will deal with all identified challenges and ensure that the healthcare system functions optimally to deliver affordable and efficient healthcare to citizens.
“We are equally proud of the State’s unprecedented educational advancement, especially in the last four years. Our public schools at all levels, irrespective of location, are some of the lovely and best-resourced in the country.”
According to him, his administration will consolidate on the progress made so far by “introducing smart schools and classrooms across the State to empower our children with world-class learning experiences and make Rivers State a knowledge hub.”
Fubara vowed to be hard on crime and criminality in the State saying, “We will be hard on crime and criminality. We will swiftly and firmly deal with anyone, regardless of status or position, rich or poor, who breaks our laws or dares to violate our environment, peace and security”.
The governor thanked civil servants for their support and promised regular payment of salary, gratuity, more training, promotion for them and housing for low income earners.
Describing the civil servants as members of his constituency, he said, “To our civil servants, I thank all of you for your invaluable contributions to the state’s progress over the years.
“We appreciate your indispensability and promise to meet all our obligations to you, including regular payment of wages, pensions, gratuity, training and promotions. All we ask is your continued patriotism, dedication, and enthusiasm in the execution of your official duties”.
He further promised to govern Rivers people with the fear of God, cognizance of the fact that Rivers is a Christian state.
He also assured the church and spiritual leaders of his administration robust partnership to enhance the moral and spiritual wellbeing of Rivers people.
“Rivers State is a Christian State, and God is our foundation. We shall govern with the fear of God and stay strong to our Christian values of trust, faith, love, care and sacrifice.”
“We shall deepen the inseparable ties between the Church and the State government for the benefit of our people. We assure the Christian Association of Nigeria and other spiritual leaders of our sincere friendship, support and solidarity.
“We will continue to support and work with the Church to defend our faith, advance our values and enhance our people’s moral and spiritual well-being”, he assured.
At the Government House, Port Harcourt, the governor hung the official portraits of President Bola Ahmed Tinubu, his own and that of his predecessor, Wike.
… Appoints Nwaeke HoS, Ideozu Acountant General
The Rivers State Governor, Sir Siminalayi Fubara, has approved two new strategic appointments in the state Civil Service.
In the latest development, the governor has approved the appointment of the most senior civil servant and permanent secretary, Dr. George Nwaeke as Head of Service, Rivers State.
He also approved the appointment of Dr Uche Ideozu as the new Accountant General of Rivers State.
A statement signed by the Permanent Secretary, Ministry of Information and Communications in Rivers State, Ibiwari Clapton-Ogolo, Esq, said that the appointments take immediate effect.
The two fresh appointments bring to six the number of appointments already made by the governor since assuming duties on Monday, May 29.
The first set of appointments was the nomination of four former commissioners under Governor Nyesom Wike as commissioner-designates.
The names are Prof Zaccheaus Adangor, Dr Dakorima George-Kelly, Isaac Kamalu, and Prof Prince Chinedu Mmom.
While Adangor was attorney general and commissioner for justice, George-Kelly was works commissioner, Kamalu was finance commissioner, and Mmom was education commissioner.
Fuel Scarcity: Tinubu Resumes Work, Meet With Emefiele, Kyari
President Bola Tinubu yesterday officially resumed work at the Presidential Villa, Abuja where he met with the Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele and the Group Chief Executive Officer of the Nigeria National Petroleum Company Limited (NNPCL), Mr. Mele Kyari.
This was the first official assignment by the President after his inauguration as the 16th President of the country at the Eagle Square, Abuja, on Monday.
The President arrived at the forecourt of the State House at about 2:30 pm through the quarter guard gate, which is his official entrance gate and was received by the Vice President, Senator Kashim Shettima, the Permanent Secretary, State House, Tijjani Umar, Speaker of the House of Representatives, Femi Gbajabiamila and the outgoing Director of Protocol, DOP.
Others who received him were Emefiele, Kyari and a member of the House of Representatives, Hon. James Faleke, among others.
The President went straight to his office with Emefiele, Kyari, Gbajabiamila, Faleke and others.
Although the agenda of the meeting was not made public, it may not be unconnected with the removal of fuel subsidy and the attendant fuel scarcity.
It is expected that the issue of unification of foreign exchange, recent Naira redesign, among others will also be discussed.
Recall that President Tinubu had during his inaugural speech announced that the subsidy has been removed and this immediately made filling stations to shut down operations across the country.
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