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Deregulation: NNPC boss admits PEF still active

There are fresh doubts over the federal government’s claim of fuel deregulation of the downstream segment of the petroleum industry with the latest admission by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, that the Petroleum Equalization Fund (PEF) was still an active component of the industry.

The PEF, established by Decree No. 9 of 1975 and amended by Decree No. 35 of 1989, is saddled with the responsibility of reimbursing petroleum marketers losses incurred by them in order to sell petroleum products at uniform prices across the country. It is a form of subsidy.

With the recent removal of subsidy by the federal government and subsequent claim of implementation of full deregulation of the downstream sector, some Nigerians have questioned the practicability of the policy given the continued existence of bodies by PEF empowered by law to provide subsidies, as well as the Petroleum Products Pricing Regulatory Agency (PPPRA) which regulates pricing of the products.

Kyari tied the fate of the PEF to the Petroleum Industry Bill (PIB) which has defied countless efforts at conclusive legislative attention spanning different assemblies.

It remains to be seen how the PEF, which has been bogged down by massive corruption allegations, will become a thing of the past given the complicated legal and structural issues, and even commercial and regional interests, at play.

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