Following revelation by the Federal Government that fuel subsidy removal had taken a burden of N15.4 billion of its shoulders monthly, a group of civil society organisations has advised that the money be deployed in targeted projects rather than keeping it in the federation account.
The advice was given during a virtual workshop in Abuja that was hosted by Media Initiative on Transparency in Extractive Industries (MITEI), a non-profit group of media practitioners committed to the promotion of transparency in the extractive industries and facilitated by Facility for Oil Sector Transformation (FOSTER II).
In attendance were representatives of other groups, including Publish-What-You-Pay.
During his presentation themed, “An urgent case for Reforms in the Petroleum Industry,” Senior Partner, Energy and Commercial Contracts, Primera Africa Legal, Mr. Israel Aye, advocated for transparent use of the N15.4 billion saved monthly, saying the government should create specific programmes as well as commit to critical infrastructure with a timeline for follow through.
He categorised the expected reforms in the industry into Governance and Institutions to take care of policy, regulation and commercial; Upstream [licensing regime, administration, gas flaring, environmental control, fiscal regime, indigenous producers and local community]; Midstream [licensing regime, infrastructure development, open access, and pricing], and Downstream [deregulation, security and supply, infrastructure development and licensing] all underpinned by transparency and accountability.
He also said there was the need to create a super regulator for the oil and gas industry with the capacity to regulate upstream midstream and the downstream, saying that the big issue about the downstream was the need to deregulate the space, even as the upstream, according to him, is still in its anti-diluvian age peopled with dinosaurs.
Recall that Vice-President Yemi Osinbajo had said in Abuja a fortnight ago that fuel subsidy removal had removed a burden of not less than N15.4 billion monthly from the Federal Government.
Osinbajo said this at the 2016 presentation of Scorecard of the Ministry of a Petroleum Resources and Agreements Signing ceremony for Joint Venture Cash Calls (JVC) exit.
”I am pleased to be the special guest of honour at the agreements signing ceremony for Joint Venture Cash Call exit and the announcement of $15 billion investments to be done in the sector.
”The oil and gas sector remains very critical to the stability and growth of our economy as it accounts for about 90 percent of earnings.
”Amongst others, the downstream sector has been deregulated with the elimination of petroleum subsidy.
”This policy has removed from the government a burden of not less than N15.4 billion monthly,” he said.
Israel, however, advocated the need to commit a lot of resources into capacity building where, he said, there was currently a huge gap.
Also calling for the creation of a legal framework for the industry, he described it as the infrastructure for development, saying “we need to reform the petroleum industry by passing a legal framework. We need to pass the law, first thing. That needs to happen.”
Lamenting the non-transparent award of oil and gas assets to unknown investors, he said steps must be taken to define due processes and procedures in the Petroleum Industry Bill (PIB) to ensure transparency and accountability, to end arbitrariness and abuse.
“The absolute powers granted the Minister of Petroleum Resources to grant the licenses for the oil assets arbitrarily should be removed,” Mr Aye said.
He condemned the absolute power of the petroleum minister to cancel licences with no room to seek redress, even as the Department of Petroleum Resources (DPR) lacks the legal backing to enforce its guidelines.
“Nigerians must demand that Beneficiary Ownership disclosure must be included as one of the intrinsic requirements and conditions spelt out in whatever guidelines the DPR will be putting out for the bidders.
“This is the only way we can guarantee only serious investors with genuine plan and capacity to exploit the national asset for the benefit of the all Nigerians will be attracted to participate,” he said.