President Bola Tinubu.
By Victor Ojei
The recent surge in fuel prices in Nigeria has sparked controversy and raised questions about the authority responsible for setting and regulating fuel prices.
This article addresses the issue by examining the legal framework and relevant court rulings. It highlights the power dynamics surrounding the subsidy removal and emphasizes the role of President Bola Ahmed Tinubu in determining fuel prices.
• NNPC Limited and its regulatory capacity
With the transformation of the Nigerian National Petroleum Corporation (NNPC) into a Limited Liability Company known as NNPC Limited, it is important to understand its new role in the fuel market. The transition positions NNPC Limited as an entity similar to ExxonMobil, Chevron, and Shell. Consequently, NNPC Limited lacks the regulatory authority to dictate or announce fuel prices. The responsibility of regulating pump prices rests solely with the Federal Government of Nigeria._
•Federal High Court ruling and the power to fix prices
A significant court ruling by Justice M. Bello in March 2013 further solidifies the argument against NNPC Limited’s power to fix fuel prices. In the case of Bamidele Aturu v Minister of Petroleum Resources and the Attorney General of The Federation (FHC/ABJ/CS/591/2009), the court ordered the defendants to comply with the Petroleum Act, now known as the Petroleum Industry Act (PIA), and the Price Control Act. This ruling specifically mandated the fixing of petroleum product prices, making it clear that market forces cannot determine prices under the constitution and the PIA.
• NNPC’s market forces claim and presidential authority
Despite the court ruling, NNPC Limited has claimed that market forces should determine fuel prices. However, this assertion contradicts both the constitution and the PIA.
It is crucial to note that in the absence of appointed ministers, the President of Nigeria possesses the power to regulate and determine fuel prices. As the head of state, President Tinubu has the authority to address the issue and ensure compliance with the law.
•Refineries, importation and subsidy failure
The discussion on fuel prices cannot be divorced from the broader context of Nigeria’s oil industry. The country, despite being an oil-producing nation, has relied heavily on importing petroleum products due to the failure of its refineries. The Nigerian ruling class and their elite partners have been accused of neglecting and intentionally sabotaging the existing refineries.
•President Buhari’s efforts and investment in refineries
When President Buhari assumed office, he vowed to address the refinery crisis. However, his government faced opposition from neo-liberal forces, which advocated against government involvement in business. The licenses issued by the previous administration for private refineries were abandoned, and a significant investment was made in the Dangote Refinery. President Buhari eventually approved funds for the repair of the Port Harcourt, Warri, and Kaduna refineries. The investment in both the Dangote Refinery and the repair of existing refineries highlights the government’s commitment to resolving the issue.
•Unlawful pricing, dollarization, and economic challenges
The current high fuel prices imposed by NNPC Limited are seen as illegal and detrimental to the average Nigerian citizen. Concerns have been raised about the dollarization of the economy, with some schools demanding payment of fees in dollars, which contravenes the Central Bank of Nigeria Act. This dollarization trend is viewed as criminal, and efforts must be made to curb it.
The recent surge in fuel prices in Nigeria has ignited a debate on the authority responsible for setting and regulating fuel prices. While NNPC Limited claims market forces determine prices, the legal framework and court rulings suggest otherwise. President Bola Ahmed Tinubu holds the key since he is yet to appoint Ministers.
Victor Ojei popularly called Wong Box can be contacted via (WhatsApp: 08038785262) or Wong Box on Facebook.