FG rules out complete deregulation of oil sector

  • As N-Assembly, Osinbajo clash over 2017 Budget

The Federal Government, yesterday, ruled out total deregulation of the downstream sector of the petroleum industry. The government added that it was aware that any attempt to deregulate and effect an increase in the prices of petroleum products, especially Premium Motor Spirit, PMS, would have serious negative consequences for the country.

Acting President Yemi Osinbajo stated this at the 2017 African Modular Refinery Discussion, organised by the Modular Refiners Association of Nigeria, MRAN, in Abuja.

Osinbajo also blamed government’s involvement for the failure and near collapse of Kaduna, Warri and Port Harcourt refineries, adding that in the new modular refineries’ initiative, oil producing communities would be made to acquire stakes in refineries set up in their locality, while the federal and state governments would have some stakes in it as well as private investors.

Osinbajo said  the Federal Government was committed to creating an enabling environment for private sector participation and investments in modular refineries, noting, however, that it is aware of the challenges and complications posed by the non-deregulation of the sector.

In spite of the challenges, he stated that the Federal Government cannot afford to undertake a complete deregulation of the sector, as it would bring untold hardship on a vast majority of Nigerians.

He said the government had reached a conclusion that it would focus on moderating the sector and would continue to intervene to ensure it creates a balance. He said: “There are those who are saying we need to deregulate fully. Why are they saying that? It is because if we do not deregulate, it is not cost effective for those who are producing PMS to sell. At the same time, if you deregulate completely, prices of everything else is going to go up.”

In the meantime, the Senate said, yesterday, it would not concede its constitutional powers to the executive arm of government.

The declaration came on a day Speaker of the House of Representatives, Yakubu Dogara, also said the House would not serve as a rubber stamp to the executive arm. Both arms of the National Assembly were reacting to a statement made by Acting President, Prof. Yemi Osinbajo, that the National Assembly had no powers to introduce new projects into the budget.

Osinbajo had alleged:  “This last budget, the President presented it last December. Despite the assurances that it will be passed by February, it was not, until May.

“As it turned out, we were quite disappointed that it took a bit of time before it was approved. And thereafter, we had to go into negotiations with the National Assembly in order to get it right. “Now, there are these two broad issues about who can do what. The first report is about who can do what. When you present a budget to the National Assembly, it is presented as a bill, an appropriation bill.

“Secondly, do not introduce entirely new projects and all of that or modify projects. This is something that we experienced last year and this year again. It now leaves the question about who is supposed to do what?”

The Senate, however, yesterday, warned the executive not to mistake its consultations with it on important national issues to mean that it was prepared to cede its constitutional powers.

Responding to a Point of Order by the Deputy Senate Leader, Senator Bala Ibn Na’Allah, APC, Kebbi South, Senate President, Bukola Saraki, noted that the Acting President must have been quoted out of context on the 2017 budget.

He said:  “I am sure the Acting President must have been misquoted because there is clearly no ambiguity in the Constitution of the responsibility of the National Assembly. ‘’This matter has been cleared and settled. So, I don’t think there are any issues here that are vague.”

Saraki, who assured that the Senate under his watch would not cede any of its powers to the executive, notwithstanding the desired consultations and cooperation between the two arms of government, said:  “ I believe that as responsible statesmen, there are times we consult and do our best to work with the executive and assist them. ‘’But as we bend backwards, I don’t think that should be misrepresented that powers given to us in the constitution do not exist.

“That is not the case, and this Senate will continue to defend the Constitution and ensure that anything we do is in line with the laws of the land. “I want to say that there are times we have a number of consultations and I want to make it clear that these consultations we do with the executive will not at any time mean that we will give up the powers we have in line with the constitution.

“I want to reassure our members on this because it is very important.  Based on what we have heard, you may be concerned that one way or another, the leadership had given up some of these powers. That is not the case.”