ENERGY analysts have challenged the Federal Government to go beyond the scrapping of some agencies in the Federal Ministry of Petroleum Resources and publish the Petroleum Industry Act (PIA) transition plan.
This, they say, will enable the government to avoid a repeat of similar mistakes made in power sector privatisation.
The Department of Petroleum Resources (DPR), the Petroleum Product Pricing Regulatory Agency (PPPRA) and the Petroleum Equalisation Fund (PEF) have been officially scrapped and do not exist anymore, the Federal Government said.
The government said while workers of the three agencies would be protected, their chief executives had been relieved of their various appointments.
Following the scrapping of the aforementioned agencies, energy analysts have called on the Federal Government to publish the PIA transition plan to enable industry stakeholders to evaluate the government’s plan and implementation.
Some of those who spoke with The ICIR said that industry stakeholders were still not being carried along, which could leave loopholes on the implementation plan.
“All I know is that government implements what the law says. However, I must tell you that we are still in the dark and we have not been specifically carried along,” immediate past Chairman of the Major Oil Marketers Association of Nigeria (MOMAN) Adetunji Oyebanji told The ICIR.
“So far, they have not engaged with us. They are actually taking bold steps as specified by the law, such as the incorporation of the Nigerian National Petroleum Corporation (NNPC), scrapping of PPPRA, PEF and others, but the sector players are still in the dark about their plan,
“Maybe they would call us later, but for now, we’re still in the dark,” he said.
Adetunji noted that one of the key problems in Nigeria was not getting people from the private sector to manage key government business, stressing that it robbed the country of better results.
Expressing similar concerns, Oil Sector Governance Expert Ademola Adigun said government must publish a transition plan for the implementation of the PIA to also affirm investor confidence.
Beyond the scrapping of agencies not required by the PIA law, the government must prioritise transparency and accountability in the oil and gas business in the country to sustain investors’ confidence, he said.
“What message are you sending to investors about your transition plan? We must go beyond the information you are giving to the press and have a step-by-step plan on how the new era would work for the benefit of Nigerians,” Adigun said.
Nigeria has experienced a poorly executed privatisation, especially in the power sector.
Poor management of oil resources has seen Nigeria pay an average of N120bn monthly on fuel subsidy while resorting to borrowing to fund its budget deficit.
Industry watchers insist the government has several lessons to learn from Saudi Aramco and Petrobras in ensuring better corporate management of oil resources for the diversification of the economy.
Prior to the coming in place of PIA, lack of a fiscal framework to drive Nigeria’s oil and gas sector had seen the oil industry lose investments worth billions of dollars to neighbouring African countries with better fiscal management strategies.
Analysts say the government must learn from power sector failures and ensure there is no repeat of the same in PIA implementation.
“Government must ensure swift transition and avoid issues of carrying over any legacy debt to facilitate the swift transition,” Professor of Energy Economics at the University of Ibadan, Adeola Adenikinju told The ICIR.
The Federal Government has inaugurated the Petroleum Industry Act Implementation Committee and has also incorporated the Nigerian Petroleum Industry Limited.
Energy analysts say government must engage with industry players to have a transition plan that will enable effective implementation of the PIA.