Home Oil and Gas Governors back full deregulation of the downstream oil sector, petrol at N162/litre unsustainable

Governors back full deregulation of the downstream oil sector, petrol at N162/litre unsustainable

by Business News Report

The Nigerian Governors forum has said that keeping petrol price at N162 per litre is unsustainable. The thirty- Six State Governors therefore called for full deregulation of the downstream sector of the Nigerian Petroleum Industry. According to the governors after receiving the report of the Kaduna State governor, Mallam Nasir el-Rufai and endorsed it resolved that for Nigeria to keep the price of Premium Motor Spirit, PMS at N162/ litre was completely unsustainable, adding that between N70billion and N210billion was  estimated to be spent every month to keep the PMS price at N162/litre. In a Communiqué at the the end of the meeting signed by NGF Chairman  and Ekiti State Governor, Dr.  Kayode Fayemi,  the Governors said, “Governor of Kaduna State, Nasir el-Rufai gave a briefing on the appropriate pricing of PMS in  Nigeria, calling for full deregulation. He noted that between N70billion and N210billion is estimated to be spent every month to keep the PMS price at N162/litre, a situation that is completely unsustainable. 

“We, members of the Nigeria Governors’ Forum (NGF), at our meeting held today, deliberated on several matters of national concern and concluded as follows:

Updates The NGF Chairman briefed the Forum on an ongoing consolidation exercise between the Forum and the Budget Office of the Federation to consolidate public finance data of the federal, states and local governments into a national budget portal. He urged his colleagues to share details of their local government budgets and financial statements in addition to State government data already published. On the Executive Order #10, talks have reached an advanced stage with the Ministry of Labour, Conference of Speakers, National Judicial Council and the NGF. All parties are working earnestly to resolve the issues surrounding the implementation of the order. There are however legal aspects of the order that need to be tied up, but which cannot take place if officials responsible for these final processes are on strike. Governors are happy to implement the demands of the  Judiciary and the Legislature. 

“The NGF-NESG Economic Roundtable (NNER) Steering Committee was inaugurated on Wednesday 21st April 2021. The roundtable is a sub-national platform expression of the NGF and NESG, based on a Memorandum of Understanding that was signed between both institutions at  the 23rd Nigerian Economic Summit (NES) in October 2017. The goal of the partnership is to promote strategic cooperation between State governments and the private sector to drive investments, economic growth, productivity, and shared economic reform agenda across the 36 States of the federation. Membership of the Steering Committee include governors of the 6 geopolitical zones and 6 captains of industry.

“The Forum received presentation from the Honourable Minister for Agriculture and Rural Development, Mohammed Sabo Nanono, on the second phase of farmer enumeration for the Agric for Food and Jobs Plan (AFJP) which is a component of the Nigerian Economic Sustainability Plan (NESP) approved by Mr. President and the Federal Executive Council (FEC) on June 24, 2020.  The programme is designed to help mitigate the impact of COVID 19 on smallholder farmers and the entire agricultural value chain. The 2nd phase enumeration is an extension of the 1st phase targeting the registration of up to 10 million farmers in the AFJP database. 2.4 million small holder  farmers were initially targeted for registration to be provided with input funding to boost food production, with about 30,000 N power (N Agro) graduates engaged and trained to carry out the farmer registration. 

“The Forum also received presentations from the World Bank led by the Country Director for Nigeria, Shubham Chaudhuri, in the company of Prof. Foluso Okunmadewa, Sector Leader of the Human Development Team, and Yue Man Lee, Task Team Leader for the States Fiscal Transparency, Accountability, and Sustainability (SFTAS) – Program-for-Results (PforR) on the Nigeria Covid-19 Action Recovery and Economic Stimulus – Program for Results (Nigeria CARES) and SFTAS.  The World Bank team commended the commitment and actions of State Governors for establishing and resourcing CARES programme State Coordinating Units under their Ministries of Planning, and requested for their additional support in areas such as the adoption of a Fund Release Policy for improved predictability of resources flows to CARES Delivery MDAs; adoption and institutionalisation of protocols for reporting, management and investigation of fraud and corruption in MDAs implementing CARES; and the release of 2021 State budgets to MDAs for the commencement of CARES-related activities. The Bank also urged the support of Governors to ensure that their Ministries of Finance and Ministries of Justice fast track the execution of subsidiary agreements for the CARES programme.

” Updates on the SFTAS programme showed that targets for results and disbursements on the 2018 and 2019 Annual Performance Assessments (APA) and new COVID-19 2020 Disbursement Linked Indicators (DLIs) have been exceeded. For the SFTAS 2020 APA and new COVID-19 DLIs,  all 36 States are on track to fully meet the Eligibility Criteria of having National Chart of Account (NCOA) compliant FY2021 budget published online by 31 January 2021. (33 States have been confirmed as fully compliant while the remaining 3 States are being reviewed).

“Under the SFTAS Program for Results, 23 States have already passed strong state-level debt legislation which stipulates: 1) responsibilities for contracting state debt; 2) responsibilities for recording/reporting state debt; and 3) state fiscal and debt rules/limits. To help Nigeria successfully  meet the World Bank Sustainable Debt Financing Policy (SDFP) by strengthening debt management, debt transparency and fiscal responsibility at the state-level, a strong collective commitment was made for the remaining 13 States to pass such state-level debt legislation by 31 December 2021.

“The NGF SFTAS Programme Lead, Olanrewaju Ajogbasile provided key lessons that have accounted for the success of performing States in the implementation of the SFTAS programme, including the institutionalization of a steering committee chaired by a very senior government official; high level monitoring and ownership with regular briefings to the State Governor or State Executive Council; dedicated budget under the Ministry of Finance to support SFTAS operations; an incentivized environment for State government officials working on SFTAS activities; and the provision of basic ICT infrastructure arrangements for focal MDAs to ensure that they are able to access remote technical assistance and meet reform actions in time.

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