Trouble Brewing over Disruption of PPPRA Operations
Chineme Okafor writes that the closure of the Petroleum Products Pricing Regulatory Agency last week by its workers could disrupt the flow of petroleum products in the country
At the risk of sounding repetitious, the practice of appointing officers from operating and marketing companies to head a critical regulatory agency like PPPRA is unthinkable
Unless amicably resolved now, the disagreement between the federal government and members of senior oil workers’ union in the Petroleum Products Pricing Regulatory Agency (PPPRA) over the choice of the head of the agency may become a full-scale industrial action.
If allowed to go on, the resultant industrial action would no doubt upset operations in Nigeria’s downstream petroleum sector, potentially disrupting fuel supply to end users across the country.
Already, existing reports on the frequency of shortage of petrol in Nigeria’s service stations indicate that the country is already going through another round of scarcity of products, apparently due to the poor management of issues in the downstream sector.
Such issues, which obstruct the freedom of the downstream sector to deliver on its tasks, have often included challenges associated with importation and distribution of products, as well as payment of subsidy payments.
Each scarcity cycle has always left palpable pains on the country’s economy.
Few weeks after the last fuel crisis ended in early January, there seems to be a real risk of another phase of products scarcity.
This fresh crisis could result from the government’s disagreement with oil workers union, the Petroleum and Natural Gas Senior Workers Association of Nigeria (PENGASSAN) over who heads the PPPRA.
The union at the weekend in Abuja warned that their protests against the new head assigned to the agency from the Nigerian National Petroleum Corporation (NNPC) will lead to a costly industrial action, if not adequately attended to.
According to the union, such action could cripple the country’s downstream sector and supply of petroleum products to end-users across the country.
This threat is real considering the fact that the PPPRA manages the government’s pricing policy on petroleum products and also regulates importation of products.
If the PPPRA’s headquarters remains shut for long, it means that its regulatory job in the downstream could also remain threatened, thus granting to marketers the liberty to operate with discretion.
Also, the push and incentive to import fuel for example at the least cost by marketers may also be affected because there will be no checks on their import volumes.
How it began The union’s disagreement with the government started after the government had dismissed the immediate past Executive Secretary of PPPRA, Farouk Ahmed, and instructed him to hand over the management of the agency’s affairs to its most senior officer.
The former PPPRA boss was among the heads of 25 agencies sacked by President Muhammadu Buhari.
In line with the government’s directive, Ahmed handed over to Mr. Moses Mbaba, who was the most senior officer, pending the appointment of a new Executive Secretary.
However, the government had few hours later reportedly sent another person, Mrs. Sotonye Iyoyo, a staff of the Nigerian National Petroleum Corporation (NNPC) to take over as the agency’s acting head.
The union then latched on the fact that Iyoyo was a staff of the NNPC, an operator, which the PPPRA equally regulates in the downstream sector, to kick against the appointment.
In describing the choice as a potential breach of the agency’s operational code, the union also said that there was no contrary announcement from the government to denounce the assumption of Mbaba as the acting head of PPPRA, hence their complaint.
The branch chairman of PENGASSAN-PPPRA Unit, Mr. Victor Ononokpono, who spoke to the press on the development, hinted that the union would prefer a peaceful resolution of the issue, to avoid its potential escalation.
He however noted that their demands for a credible leadership at the agency would not be compromised.
Ononokpono admitted that the union had met with officials of the ministry of petroleum resources ,who told them that the issues on ground was beyond them and that they would have to wait for the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who was away on official trips to Saudi Arabia and Qatar.
The union’ demands Ononokpono stated that the union will not welcome the appointment of any persons from any of the downstream operators the PPPRA regulates in the country’s oil and gas sector as its head.
He also said that the union was not pushing for the appointment of any persons from its internal pool of human resources to head the agency but anyone that is independent and fit to provide the right leadership for the agency.
According to him, the PPPRA has had to operate on the basis of the interests of its heads who in the last eight years have come from the pool of NNPC’s human resource.
Ononokpono in this regard asked the government to rather look elsewhere for persons with the right competences to head the agency, saying that an appointment of persons from agencies in the sector would further hamper the regulatory mandate of the PPPRA.
“The union commenced this peaceful protest on Tuesday, 23rd February 2016 to register its displeasure over the incessant deployment of NNPC staff as chief executive officers to PPPRA, a practice that began in 2008 when the agency’s pioneer executive secretary was relieved of his appointment.
“That change in leadership changed the prospect of the agency in an undesirable way. From that point onward, the independence of the downstream regulator took a continuous slide towards partisanship and collusion,” said Ononokpono.
He explained that the Act, which established the PPPRA expected it to become an autonomous agency to primarily regulate the downstream sector, adding that the ministry of petroleum resources has rather chosen to deploy staff from the NNPC to head the agency in the last eight years.
“At the risk of sounding repetitious, the practice of appointing officers from operating and marketing companies to head a critical regulatory agency like PPPRA is unthinkable.
It leaves a sour taste indeed. How do you regulate your bosses? How do you query your pay master? How do you align with global best practices? How do you promote control and checks in corporate governance? These are the questions the protest seeks answers to,” he added.
What next? The workers said that they would continue their protest and interruption of headquarter operations of the agency until the government takes up their case.
Ononokpono who also took time to explain that protest was not based on the personalities of Mbaba and Iyoyo, stated that the union would not dictate to the government who it should appoint as the chief executive of the agency but wants it to do the right thing in this regard.
He alleged that PPPRA has become a settlement ground for external interests and that such interests are often entrenched against the statutory mandate of the agency.
“The haste in appointing another acting chief executive for PPPRA is curious. However, I do not think it is the federal government.
“I believe there are external forces other than the federal government because when the second executive secretary came in, the haste with which she started handling files and even sign out payments for subsidy claims is alarming, especially when the person currently there has not briefed her or handed over to her,” Ononokpono said.
He further explained that: “She signed out Batch P of subsidy claims payments for second quarter. We are talking of subsidy payments due for second quarter of 2016.
“The amount approved for subsidy payment was N3.4 billion (outstanding/carryover). Is it a coincidence to think that was the first file she reached out to?”
On the impacts of government appointing its head from a marketing operator in the sector, Ononokpono said: “In the last 10 years, this has been the trend; it has affected and impaired the activities of PPPRA in no little way and we are saying going forward, this is a season of change, it presupposes that due processes must be followed.”
“If we want to address the issue of regulation and control in Nigeria, we must also determine the source of leadership. It is key. That is the union’s grouse, the source of leadership,” he added.