NAEE: With PIGB in Place, NNPC’ll Have No Excuses for Under-recovery, Losses
Asks Buhari to assent to bill before beginning his re-election campaign
The Nigerian Association for Energy Economics (NAEE) yesterday stated that the imminent promulgation of the Petroleum Industry Governance Bill (PIGB) which the two chambers of the National Assembly have harmonised for presidential assent would take away every excuse proffered by the Nigerian National Petroleum Corporation (NNPC) as reasons for its loss-making streaks and under-recoveries for importing petrol in the country. NAEE, which stated this in Abuja at a pre-briefing on its forthcoming annual conference scheduled for this week, also asked President Muhammadu Buhari to immediately assent to the PIGB before he begins his 2019 re-election bid. The body’s president, Prof. Wumi Iledare, explained that the continuous loss-making records of the NNPC would be curtailed once the PIGB becomes effective, adding that at that time, very clear business demands would be made of its management by its shareholders who would give to it some key performance indicators (KPIs) to meet. Iledare, stated that the NAEE had in 2015 warned the Buhari administration to avoid the temptation of regulating the downstream petroleum sector of the country, and instead deregulate it to escape the current challenges that are currently overwhelming it. He inferred that if the government had listened to the association’s advice, the country would perhaps not have under-recoveries in petrol supply which the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, recently said had shot up to N1.4 trillion per annum. “I think also that if you look at the industry, we are not in any way operating a deregulated downstream, what we have is what I will call a price ceiling that has been misinterpreted as a price floor. “That means that when you have a price ceiling, you do not want the price to go beyond that, yet the equilibrium price is somewhere high because when you have a price floor, equilibrium is supposed to be below the price floor, and that is more or less a misinterpretation. “We warned the government then, at that particular time there was an opportunity not to put any price because the price on the seat was already N200 (per litres of petrol) and you just say that you are out, unfortunately, you cannot recover what you pay for in dollar using naira when the exchange rate is unstable and that is what we have,” said Iledare.