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)
Compiled by Olaleye Aluko
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