Lagos — The decision of the Federal Government to deregulate the oil sector has generated a lot of controversies from stakeholders. While the labour kicked against it, government insisted that the exercise would benefit the people. Sheriff Balogun in this report, examines the arguments of both sides

The Federal Government has been shifting the date for its planned deregulation of petroleum products, due to the stiff opposition from some stakeholders. Government had earlier announced that the deregulation would start early this month, but the date for the kick-off has now been postponed till a later date.

The exercise has however, generated reactions from the stakeholders in the country.

First to kick was the Nigeria Labour Congress (NLC). The congress president, Omar Abdulwaheed, led a protest rally to the National Assembly. In his address during the rally, he said workers were against the policy because it was not in their interest.

He said: "The subsidy is not the problem in the downstream sector; the problem is the high rate of corruption perpetrated in the sector. It is only a few Nigerians that stand to benefit from the act and it is unfair on the part of the government to increase the hardship of Nigerians by increasing the price of petrol to N104."

Some of the posers raised by the Labour is that why should government get the will to deregulate, when it does not have the will to fight corruption in the oil sector. How long does it take to build refineries and why is government not making public, the names of those benefiting from the corruption?".

In his reaction, President General of the Trade Union Congress (TUC), Comrade Peter Esele, decried and rebuffed government's decision on full deregulation, saying if the precedent conditions that would alleviate the hardship on Nigerians were not met, it would negatively impact on the masses.

Also, the founder and leader of Oodua Peoples Congress (OPC), Dr. Fredrick Fasehun, condemned the planned deregulation of the downstream sector of the industry, saying the President has the responsibility to ensure that the government dispenses major benefits to majority people.

According to him, "deregulating the downstream sector of the petroleum industry will only benefit a few, while bringing untold hardship to the vast majority. We appeal to Yar'Adua not to subject Nigerians to a nightmare".

He said if the government preferred to open another warfront, OPC would have no choice but fight on the side of the masses and the government will be the end loser, noting that deregulation was like the police impounding people's vehicles to beat car snatchers or starving the baby because the nanny steals baby milk.

"It amounts to misguided aggression against the innocent. We shall therefore advise that rather than take its frustrations out on the innocent masses, government must exercise the political will to identify, prosecute and punish those responsible for mismanaging deregulation allocations", he added.

Also the Head of Gani Fawehinmi Chambers and son of the late legal luminary, Mr. Mohammed Fawehinmi, while reacting to the Federal Government plan to deregulate the downstream sector, urged the Federal Government to suspend its planned deregulation of the sector, saying what was expected of the government was to put the existing refineries in a good working condition and cater for the well-being of Nigerians.

Fawehinmi stated in a statement made available to THISDAY that Federal Government and the National Assembly are expected to have a rethink in their quest to deregulate the downstream sector of the petroleum industry in view of the drastic effect on the masses and because the economies yet to fully recover from the global economic meltdown.

However, Director-General, Lagos State Chamber of Commerce and Industry, Mr. Muda Yusuf, in his positive view on deregulation said the plan to deregulate the downstream sector would have a positive effect if properly managed. "The deregulation of the downstream sector may at first have a hard effect on the country, especially on small businesses using PMS and those using cars, but on the long run, it will be beneficial to the nation's economy as this will allow improvement in the private sector. This will give room to more private investments and refineries can open the market and a better pipe line management than what is obtainable now.".

However, the Minister of Finance, Mansur Muhtar, who provided insights into why government must deregulate the downstream petroleum industry, said the much-touted buoyant Excess Crude Account from which the Federal Government draws money to finance critical sectors of the economy, which include payment of marketers who import fuel, has indeed shrunk to a mere $7 billion.

He added that while government is desirous of fulfilling its role of providing for the welfare of Nigerians, without deregulation, it would only succeed in lining the pockets of few privileged Nigerians who benefit from the collective miseries of the Nigerian people.

Muhtar also said while Labour's argument that government should provide infrastructure first before deregulation, he was however quick to observe that considering the present situation, such decision is considered a luxury because the money to finance the critical sector of the economy is not available.

His explanation: "We have to draw money from the excess crude account to pay the importers. I can tell you that one day, we will wake up to discover that we can no longer pay the bills even if we want to continue to subsidize. This is going to happen very soon. We have only $7 billion left in the excess crude account. Every time we go to meetings, governors complain and ask why the Federal Government is withdrawing money from the account, saying 'after all, our states are not benefiting from the subsidy and that at any rate, the state House of Assembly has not given approval for such deduction' even as the Federal Government is preaching due process and rule of law.