NEWS: Should FG scrap NNPC , DPR , PPPRA?


The scrapping is a mere proposal
because we have yet to be fully briefed
on this matter. But the fact is that the
government has an intention to make
the Nigerian National Petroleum
Corporation more efficient.
However, the dimension and the way to
go about it are still an issue we need to
engage the government on. The issue of
scrapping is entirely new.
The position of PENGASSAN has always
been that there should be no scrapping
of the NNPC. The government should do
all it could to ensure the passage of the
Petroleum Industry Bill. The PIB takes
care of all these issues that have been
raised.
The government should not be working
on the periphery. We want the
government to do the right thing. Let
the PIB be passed.
The PIB is what will attract investors.
Let us give investors a structure of how
the oil and gas sector runs in this
country. This will encourage them and
enhance the system to run effectively.
The PIB will put in place structures that
will clearly define how the oil and gas
sector is managed in the country. It will
specify how any investor coming into
the country should operate.
Until that structure is put in place, the
business of oil and gas cannot have a
shape. Ghana, Angola and Algeria have
passed the bill and we need to adopt
this. Let the government do the right
thing. •Emmanuel Ojugbana (National
Secretary, Petroleum and Natural Gas
Senior Staff Association of Nigeria)
The Federal Government ought to
completely dissolve the Nigerian
National Petroleum Corporation and
also privatise all the commercial
undertakings of the agency.
This is because the NPPC is a business
enterprise and the government of
Nigeria does not have that credibility
and the capacity to profitably run a
business enterprise.
The Federal Government recorded past
failures in some other areas of the
economy which bounced back after
privatisation. Look at the
telecommunications sector where the
Federal Government failed woefully until
the sector was privatised. We all know
where we are presently.
Look also at the power sector. Although
we are not there yet, and the
privatisation was not properly done, but
over time, the country will start enjoying
the benefits of government’s
disengagement from the power sector.
Also, the NNPC is still there handling
the refineries and we know that our
refineries are almost moribund. They are
not contributing anything to us other
than being a national disgrace. So,
when these enterprises cease to be
managed by the government, things will
be better. So, why should an agency like
the NNPC still be managed by the
government?
Look at all the agencies managed by the
government; they have all failed. This is
because the government is a
bureaucratic arm; it can provide social
services but not economic services.
Anything that has to do with the
economy cannot be run like a
bureaucratic structure; it has to be run
like a corporate structure. The functions
of the government are bureaucratic;
government cannot produce any lasting
profit on economic services.
This is why the government should
scrap all these agencies and privatise
the oil sector. But they should retain
only the Department of Petroleum
Resources because it is a regulatory
agency.
If you go to the capital market, you have
a regulator. When you go to the
telecommunications sector, you also
have a regulator. So, the role of the
government in this area is regulatory,
not as an operator.
I agree that the government should not
scrap the DPR. It should be reorganised
into a regulator of the oil and gas
sector, so that efficiency could be
reintroduced. Market policy should be
allowed to drive the sector.
There cannot be job losses as a result of
the scrapping of the agencies. Rather,
there will be massive job creation. Let
us look at NITEL; when it was scrapped
more jobs were created by the private
companies which sprang up.
If the FG does the same to the NNPC
and their activities are taken over the
private sector, thousands of more jobs
will be created for Nigerians. •David
Adonri (Economic expert/CEO, High Cap
Securities)
I agree that there are institutional
reforms that need to be made in the oil
and gas sector to make the sector live
up to the objectives for which it was set
up.
But that is always something that
requires consultation so that a rational
decision could be made. The government
cannot just wake up and say it is
scrapping the agencies. How do you
take care of the roles for which these
agencies were established?
Take the Petroleum Products Pricing
Regulatory Agency for an example, it
was the outcome of a stakeholders’
engagement that led to its
establishment. Its primary aim is to
insulate Nigerians from the arbitrary
prices of petroleum products.
Therefore, if there is the need at all to
scrap, another stakeholders’ engagement
needs to be embarked upon. We need to
do things in more systematic ways in
this country. If there are weaknesses
that have been discovered in these
agencies, we need to engage relevant
stakeholders and see how these can be
corrected.
For instance, some functions of the DPR
have to do with quality assurance, ways
and measures to protect the consumers.
So, what have you put in place to carry
out the key functions of the agencies?
We need to holistically carry out any
policy concerning these agencies. It also
does not mean that scrapping of these
agencies will lead to job losses. That is
why there must be consultation. I do not
feel that scrapping is the best solution,
anyway.
That is why it is important to engage
the stakeholders and bring out
alternative ways to go about the roles of
the agencies.
Peter Ozo-Eson (Secretary, Nigeria
Labour Congress, Lagos State)
I think the three agencies are partly
commercial and partly regulatory
agencies. Therefore, what the
government wants to do is to divest
itself from their regulatory roles and
make them solely commercial
enterprises.
There will then be a central regulatory
agency that combines the functions of
the three.
The NNPC will be a commercial venture
just like what you have in other
countries. The regulatory role should be
divested. You cannot be a regulator and
an operator like we have in these
agencies presently. It is wrong.
Even the DPR is also not yet a fully
independent regulatory agency.
The Federal Government is, therefore,
pushing for a review of the agencies
with a view to making them commercial
enterprises. The Federal Government
also wishes to inaugurate an agency,
whose only role would be regulatory.
Such an agency will not be an operator
in the oil and gas sector.
This will make the country to have a
holistic approach to the sector.
For an institution like the PPPRA, we
must adopt a purely deregulated
downstream sector. We must not lose
the purpose of being a fully deregulated
downstream sector.
In actual fact, you have these agencies
as multiple regulators running into one
another’s functions. Hence, I agree that
we should have a central regulatory
body and let these agencies focus on
purely commercial ventures.
The other thing we need to adopt is the
concept of incorporated ventures, which
minimises government’s intervention in
the running of the enterprises. • Johnson
Chukwu (Economic expert/ CEO Cowry
Assets Limited)
We all know that the mainstay of our
economy is oil and the only bodies that
coordinate this are the NNPC and the
agencies. Maybe the Federal
Government means it wants to change
their nomenclature but scrapping these
agencies is totally dangerous.
It is just like saying that the government
wants to scrap the Nigerian military.
The government needs to seek advice
from, competent economic hands and
shun its intellectual arrogance.
What the oil and gas sector needs is
adequate managerial ability. The
corruption in the system must also be
tackled. The government must search
for the people with the economic know-
how, irrespective of their party
affiliations and bring them to rebuild
this economy.
Almost all the states in the country now
have oil. It will then make it complex, if
it is at this time that the Federal
Government is coming up with the idea
to scrap the agencies. •Gani Taofik
(Publicity Secretary, Peoples Democratic
Party, Lagos State)
For every decision proposed by the
Federal Government, there are always
positive and negative sides to it.
There are usually reasons to agree or to
disagree with the scrapping of these
agencies.
Those who are calling for the scrapping
say the agencies have not been
functioning at the appropriate
capacities.
But generally speaking, while it is not a
bad idea, we should do this
restructuring gradually. A sudden
scrapping would allow for increase in
fuel prices.
If the government does this scrapping
without the proper consultation, the
private sector will in the name of the
privatisation, push up prices. This is not
proper. •Leo Ukpong (Professor of
Financial Economics)

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