President Muhammadu Buhari
President Muhammadu Buhari

The President, Nigerian Association for Energy Economics (NAEE), Prof. Wumi Iledare, on Saturday urged President Muhammadu Buhari to sign the Petroleum Industry Governance Bill (PIGB) before 2019 elections campaigns begin.

Iledare made the call at a pre-conference news briefing in Abuja, ahead of the 11th NAEE/IAEE International Conference beginning on Monday.

The National Assembly passed the bill on March 28 following the unanimous adoption of a report on the Bill presented by Chairman, Senate Committee on Petroleum (Upstream), Sen. Tayo Alasoadura.

In passing the bill, the lawmakers approved in it, five per cent levy on petroleum products sold in the country.

Iledare urged Buhari to assent to the bill quickly as it still had 12 months to 24 months transition period after the president’s assent “to cushion any event of macro-economic shock”.

“I am not saying he shouldn’t evaluate. He should not assent to it without reviewing it further and that is why we have separation of powers.

“I think he has sent the bill to some critical sectors in the executive arm to look at it to get informed. If I am to advise the executive, I will say look ahead, not the now.

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“If I were the president, I will sign it before the election campaigns begin because it will give him something to say look, I have done it after 18 years.

“The president needs an energy council, a competent body of energy professionals to look at the energy supply mix for Nigeria, just like you have in some other places.

“The reason why you see the shale gas developments in the U.S. is because of the Potential Natural Gas Committee that has existed for many years.

“I said this when Buhari came to power, that there is an energy council that is moribund and should be revamped,’’ Iledare said.

He said the Nigeria National Petroleum Corporation (NNPC) was experiencing under-recovery because it could not recover what it pays for in dollars using naira in an unstable market.

“We warned the government then, at that particular time there was an opportunity not to put any price because the price on the street was already N200.

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“Unfortunately, you cannot recover what you pay for in dollars using naira, when the exchange rate is unstable and that is what we have.

“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.

“This 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.

“This is because when you have a price floor, equilibrium is supposed to be below the price floor, and that is more or less a misinterpretation.’’

According to him, under-recovery will not continue for a long time because when the PIGB is assented to, the NNPC becomes a commercial entity with shareholders that will receive dividends.

“This means that there will be key performance indicators that whoever is heading NNPC will deliver to shareholders,’’ Iledare said.

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On his part, Vice President of NAEE, Prof. Adeola Adenikinju, said he was worried about the structure of subsidy in Nigeria.

“If you look at Kerosene, the poor people buy it at market price; diesel, the companies buy at market price and petrol, which is the product that is widely used by the elite, is the one that has this kind of issue.

“I am worried because again, if price is not playing the signaling role to investors, it becomes difficult to activate investments in that downstream sector”.

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, had also said that PIGB when assented to, would grow the nation’s oil reserves.

The Bill is the culmination of several years of efforts at reforming the oil and gas industry.

The process began under former President Olusegun Obasanjo in 2000, with the establishment of “Oil and Gas Implementation Committee’’.