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General News of Wednesday, 18 August 2021

Source: punchng.com

'Govt, labour have agreed on deregulation' - Minister

Minister of State for Petroleum Resources, Chief Timipre Sylva Minister of State for Petroleum Resources, Chief Timipre Sylva

The Federal Government, on Tuesday, said it had reached a consensus with the organised labour on the need to deregulate the downstream petroleum sector and allow market forces to determine the pump price of Premium Motor Spirit, popularly called petrol, based on the provisions of the new Petroleum Industry Act.

It, however, noted that a framework on how to deregulate the cost of the commodity was being worked on by both parties, insisting that petrol price must be deregulated.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, who disclosed this at a press briefing in Abuja, noted that the President, Major General Muhammadu Buhari (retd.), would provide details on the new Act today (Wednesday).

The PUNCH reported on Monday that petrol price could jump from the current N162-N165 per litre price to as high as N300 per litre should the government implement the provisions of the new Act immediately.

Sylva also stated that the unbundling of the Nigerian National Petroleum Corporation would take effect in the next six months as stipulated in the Act.

Reacting to the N162 to N165 per litre petrol price and whether there would be an increase, he said there had been a consensus on deregulating the cost of the commodity.

Sylva said, “The issue is not just about discussing with labour, because we agreed between labour and us that we need to put a framework in place for the implementation of deregulation.

“Because more or less, there is a consensus across the table now that deregulation is desirable. But how do we achieve it? That’s the question now. We and the organised labour have agreed and so we are now in the process of putting the infrastructure and process in place.”

He added, “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.“But we are trying to work out the processes to come to fruition because right now, we don’t even have a choice anymore. It is a matter of law.”

The minister noted that the increase in petrol price would not be immediate, but insisted that the downstream sector would be fully deregulated soon.

He stated, “Well 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 and that is why we are not going to jump to implement it immediately.

“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.”

On when the new NNPC would emerge as captured in the Petroleum Industry Act, the minister said the law clearly stipulated a timeframe for this. Sylva stated, “It has given a timeframe of six months within which time the ministries of petroleum and finance will together incorporate the new NNPC Limited.

“That process will soon start according to the law that is in place now, but we will wait for Mr President in order not to pre-empt what he will say (on Wednesday at the Federal Executive Council meeting).

“Also on the issue of a transition committee, that is very desirable and Mr President, I believe, is going to make a statement on that.”

The minister added that his team had been able to handle petrol smuggling and other challenges in the oil sector while speaking on his stewardship in the past two years.

He said, “When we started in 2019, the President handed down nine mandates to us. So far, I can tell you without fear or favour that we have ticked all the boxes.

“From eradicating cross-border smuggling of PMS to completing the gas flare commercialisation and LPG penetration, increased crude oil production and reduced cost of oil production by at least five per cent.

“Others include facilitating the passage of the PIB, implementing the Deep Offshore and Inland Basin Act, working with the private sector to increase domestic refining and collaborating with the private sector to create jobs.”

On concerns by communities in the Niger Delta on the three per cent approved for host communities in the new Act, the minister said it was better left at that in order to attract investors to boost oil production in the region.

He noted that increasing the percentage would warrant higher operational costs for investors and this might prevent industry players from showing interest in the region, a development that would leave oil dormant in the ground.

Sylva also stated that the Federal Government would invite dealers of Liquefied Petroleum Gas, popularly called cooking gas, to find out ways to address the rise in gas price.