The Bureau of Public Enterprise (BPE) recently gave credence to the earlier statement credited to the Minister of Petroleum Resources, Diezani Alison-Madueke in London according to which the federal government had concluded plans to sell off its four state-owned oil refineries before the end of the first quarter of next year. My dear friend, the Head of Public Communications of BPE, Mr Chigbo Anichebe announced two weeks ago that President Goodluck Jonathan had approved the privatisation of the nation’s four refineries in keeping with the economic reform programme of his administration. Very few observers of the petroleum sector would disagree with the Minister Diezani Alison-Madueke that government in recent times in particular “had not done a very good job over the years”in the business of running major infrastructure refineries inclusive. What with wholesome products importation? What with gross under capacity utilization of the refineries? What with poor or controversial book keeping, endless start-stop Turn Around Maintenance (TAM), start- stop products Scarcity and corruption of varying dimensions? But even at that many observers of the petroleum sector also wonder aloud if the immediate priority of the industry now is another emergency privatisation or the passing of the decade long much awaited Petroleum Industry Bill (PIB). The point cannot be overstated; whether privatised or state own, the industry cannot operate within the context of an obsolete and deficient legal framework. It is a sad commentary that the principal legislation for the industry, (which remains the primary source of financing the economy) is the moribund Petroleum Act, enacted in 1969, over 40 years ago when the industry was at its infancy. Petroleum Industry Bill (PIB) has been in the works for over a decade. It has passed through 6th and 7th assembly of the senate and
the House without the bill not being passed to law. The star word Nigerians want to hear from Minister Diezani is the immediate passing of the PIB, not the emergency privatisation without an appropriate legal framework.
With its acknowledged shortcomings and some clauses begging for improvement, I bear witness that the PIB is still adjudged today to be one of the most important legislative bills in the history of the country due to the critical role of the petroleum sector in the Nigeria economy. Yet the arguments for or against the bill have not in any way featured in the current government/ opposition parties’ wars of attritions. Indeed I search in vain for a mention of an important historic piece of governance legislation called PIB in the two notorious letters
of both former President Olusegun Obasanjo and President Goodluck Jonathan. The absence of the PIB in both OBJ’s and GEJ’s shows that the quarrels are certainly not about the Nigerian people or better still not about transforming the petroleum sector. Yet it is an open knowledge that Crude oil receipt accounts for “about 80 percent of total government revenue, 95 percent of foreign exchange earnings, about 16 percent of Gross Domestic Product (GDP), and four percent of total employment – thus making Nigeria one of the most oil-dependent economies in the world”. Why then will a proposed law that is meant to institutionalise transparency, accountability and attract new investment and even unbundle the NNPC not invoke a sense of urgency? Can we truly have a genuine privatization of the refineries without an appropriate modern legal framework like PIB? Is the proposed privatization meant to enhance production, create more jobs or is it another opportunity for public assets’ stripping and insiders’ dealings that will be of benefits to a few and a loss to the nation? If we are yet to reap the benefits of the power sector privatisation, how can the Nigerians be convinced that emergency privatization of refineries will not worsen the
products supply crisis, lead to massive job losses and foreign dependency. Given that privatisation of the refineries was done under President Obasanjo without clear cut transparency and subsequently reversed by President Yar Adua, in the absence of PIB, how transparent and sustainable can the new feverish privatization be?
The highlights of the Petroleum Industry Bill (PIB) include creating a conducive business environment for petroleum operations; enhancing exploration and exploitation of petroleum resources in Nigeria for the benefit of the Nigerian people, optimising domestic gas supplies, particularly for power generation and industrial development; establishing a progressive fiscal framework that encourages further investment in the petroleum industry while optimising revenues accruing to the government; establishing commercially oriented and profit driven oil and gas entities; deregulating and liberalising the downstream petroleum
sector; Promoting transparency and openness in the administration of the petroleum resources of Nigeria; Promoting the development of the Nigerian content in the petroleum industry; Protecting health, safety and the environment in the course of petroleum operations; and attaining such other objectives to promote a viable and sustainable petroleum industry in Nigeria which certainly must include putting an end to the criminal oil theft. Significantly too, “the PIB is meant to create a legal and regulatory framework that is 21st century compliant and engender sweeping reforms of our oil and gas sector – create new institutions to govern the operations of the industry; break the NNPC into three main companies
with a fully-capitalised and profit-oriented National Oil Company; and institute a new fiscal regime amongst others”. All these objectives are laudable enough to preoccupy the Minister compared to the the unstated objectives of an emergency privatisation. The proposed privatization of the refineries also raises issue about our approach to reform. Must we promote an Immediate effect approach (18 months!) reminiscent of the military era or gradualist Approach associated with most democracies? If we cannot pass PIB in ten years, why selling off refineries in 18 months?
Issa Aremu mni
