Champions of deregulation gained the upper hand yesterday.
Acting President Goodluck Jonathan has given his blessing to the planned deregulation of the oil industry’s downstream sector, Nigerian National Petroleum Corporation (NNPC) Group Managing Director Sanusi Barkindo said.
He told the House of Representatives Committee on Petroleum (Downstream) that Dr Jonathan has directed NNPC to get set for deregulation.
Barkindo stunned the lawmakers when he said the Ministry of Finance should be questioned on where it got the trillions of naira it has spent over the years to fund fuel subsidy.
He spoke amid allegations by the House Committee on Procurement that NNPC awarded itself a N2 billion contract for the maintenance of Warri and Kaduna refineries.
Barkindo said the Acting President was convinced that deregulation was the only way forward in the sector.
His words: “I got from the Acting President his commitment, personal commitment – I can disclose to you here – that he is committed to deregulation of the downstream. He charged us to conclude all consultations because, as a democratic government, he does not want to take a unilateral decision.
“He is convinced, just like you (committee members) are convinced that in the long run, we have to fundamentally address these challenges once and for all; we have to change the operating environment.
“And it’s only through deregulation of the downstream sector, together with the provisions of the Petroleum Industry Bill (PIB). But we must go and consult with all the stakeholders,” he said.
Barkindo shocked the lawmakers when he said he had no idea where the Ministry of Finance gets its subsidy for petroleum products from.
He warned that the present normalcy in fuel supplies is not permanent as the Corporation cannot cope with the pressure of standing in for major marketers whenever they stop importation.
“I cannot put my hand on my heart and tell you this will be sustained; I will be telling you a big lie. The current normalcy you’re seeing now cannot be sustained because it’s just a fire-fighting move.”
He said the lackadaisical attitude of managers who treat the refineries as a government department with ready subventions also contributed to the continued scarcity of petroleum products.
The chairman of the committee, Hon. Clever Ikisikpo, challenged the corporation over the amount spent on the Turn Around Maintenance (TAM) of the Kaduna and Warri refineries, saying the explanation of the Group Executive Director, Refineries and Petrochemical, Mr Austin Oniwon, that it ordered equipment 18 months before TAM was no excuse to dump procurement procedures.