Nigeria: Continued Relevance of Petroleum Equalisation Fund
Where justice is denied, where poverty is enforced, where ignorance prevails, and where anyone class is made to feel that society is an organised conspiracy to oppress, rob and degrade them, neither persons nor property will be safe – Frederick Douglass.
Recently, there has been a stratospheric increase in strident calls for either a restructuring, merger or even an outright liquidation of the Petroleum Equalisation Fund(Management)Board, in the media.
Those pushing these views are encouraged by the depression of oil prices in the world oil market, powered primarily by the Covid-19 pandemic.
To them, the Petroleum Equalisation (Management) Board (commonly known as PEF), has either outlived its usefulness or at best, should be made to be an arm of a parastatal, under the Ministry of Petroleum Resources. Some are quick to allude to the Oronsaye Report, which recommends a merger of the PEF with the Petroleum Products Pricing Regulatory Authority (otherwise known as PPPRA).
In truth, as a measure of good faith, and in a bid to ensure that Nigerian citizens benefit from the drop in oil prices, the Buhari Administration in its wisdom, decided some two months ago, to reduce the pump price of Premium Motor Spirit (PMS or petrol), to N125 per litre (and then to N123.50 in April) from the prevalent N145 per litre).
Those calling for the tinkering with the statutes and responsibilities of the PEF are now citing the good gesture of the government as the basis of their arguments and seeking complete deregulation of petrol prices.
What makes them so sure that oil prices will forever remain depressed? What happens when prices rally, especially as the nations of the world re-open their economies as they are gradually doing now?
About three months ago (March 2020), the average price of the Brent Crude (sharing similar characteristics with Nigeria’s Bonny Light), was $32.01 per barrel.
In the successive month of April, when the pandemic was raging in some parts of Europe and the United States of America, the price of the Brent nosedived to $18.38 a barrel, on the average.
By the second week of May, the price has gained some traction at $30.07 dollars per barrel.
The world oil market is ever dynamic and that is why responsible governments the world over, do not joke with anything that can throw a clanger in the socio-economic indices of their development agenda as well as the overall well-being of their people.
Source: This Day