. Sylva clarifies subsidy removal on PMS
President Muhamamdu Buhari has approved the Steering Committee to oversee the immediate implementation of the newly-signed Petroleum Industry Act 2021 under a one year tenure mandate.
On Monday, while still working from home in line with COVID-19 protocols, the President signed the PIB into law in effort of his determination to fulfil his constitutional duty.
The Special Adviser to the President on Media and Publicity, Femi Adesina, in a statement issued on Wednesday, listed the Minister of State, Petroleum Resources, Timipre Sylva, as the Chairman of the Committee.
Other members include the Permanent Secretary, Ministry of Petroleum Resources; Group Managing Director, NNPC; Executive Chairman Federal Inland Revenue Service (FIRS); and Representative of the Ministry of Justice; Representative of the Ministry of Finance, Budget and National Planning.
Also in are the Senior Special Assistant to the President on Natural Resources; Olufemi Lijadu as External Legal Adviser; while the Executive Secretary, Petroleum Technology Development Fund (PTDF), will serve as Head of the Coordinating Secretariat and the Implementation Working Group.
Defining the Committee’s mandate, the statement reads: “The primary responsibility of the steering committee shall be to guide the effective and timely implementation of the PIA in the course of transition to the petroleum industry envisaged in the reform program, and ensure that the new institutions created have the full capability to deliver on their mandate under the new legislation.
“The Committee has 12 months duration for the assignment, and periodic updates will be given to Mr President.”
The primary responsibility of the steering committee shall be to guide the effective and timely implementation of the PIA in the course of transition to the petroleum industry envisaged in the reform program, and ensure that the new institutions created have the full capability to deliver on their mandate under the new legislation.
Implications of the Law
Ahead of today’s Steering Committee constitution, Sylva, on Tuesday, clarified that the PIA may not automatically translate to a hike in pump price of premium motor spirit (PMS) also called petrol as feared in many quarters to herald full deregulation and removal of subsidy from the downstream sub-sector.
He also said a national oil company (NOC) as provided in the Act will be incorporated within the next six months to transform the Nigerian National Petroleum Corporation (NNPC), a limited liability company.
Noting that price increases will be determined by market forces, the Minister however added that efforts would be made to establish structures to reduce the impact of subsidy removal on Nigerians.
He said: “As you know, the Act has actually deregulated the sector, but that doesn’t mean that there will be an immediate implementation of the deregulation.
“What the Act provides is that products will be sold at market dictated prices. But we are mindful of the fact that this will bring some hardship, which is why we are not going to jump into implementing it. The implementation framework will take care of that as well as how we are going to alleviate the sufferings that this might bring.
“It is not going to be automatic. We have been working with labour to ensure that there is a framework that will allow us to implement this deregulation provision of the Act.”
To this end, he said the Federal Government will be working with labour unions on how to implement the provisions of the Act, noting that “The issue is not just about discussing with labour, because we agreed between labour and government that we need to put a framework in place for the implementation of deregulation.”
According to the Minister, “There is consensus across the table now that deregulation is desirable. But how do we achieve it? That’s the question now. Labour and government have agreed and so we are now in the process of putting the infrastructure and process in place.
“Once we are able to agree on that process with labour then we are ready to deregulate. So, we will keep it within that band (N162 – N165 per litre) for the time being.”