NNPC restructuring is illegal – Falana

11 March 2016, Lagos – Senior Advocate of Nigeria, Mr. Femi Falana, has described the reorganisation of the Nigerian National Petroleum Corporation by the Minister of State for Petroleum Resources, Dr. Ibe Kachukwu, as illegal.

Mr Femi Falana

Mr Femi Falana

According to him, having realised the illegality of the reforms, the minister, who is also the group managing director of the NNPC, has said that he has not unbundled the corporation but is merely reorganising it.

Falana said in a statement on Thursday, “It is pertinent to point out that the reforms being carried out by the NNPC GMD are illegal in every material particular. Section 2 of the Nigerian National Petroleum Act stipulates that the affairs of the corporation shall be conducted by the Board of Directors of the body. To that extent, it is the board of the corporation that is saddled with the responsibility to carry out the reorganisation of the body.

“The board of the NNPC shall consist of the Minister of Petroleum Resources; Permanent Secretary, Federal Ministry of Finance; the managing director of the corporation and three other persons appointed by the President. The minister shall be the chair of the board. By virtue of Section 3 of the Act, the managing director of the NNPC shall be the chief executive and shall be responsible for the execution of the policy of the corporation and the day-to -day running of its activities.”

According to him, since the board has not been reconstituted by President Muhammadu Buhari, the minister has usurped its functions and has been running the affairs of the NNPC like a sole administrator, adding that the combination of the posts of GMD of the NNPC and minister of state had compounded the illegality.

Falana stated, “It is an anomalous situation whereby the minister, as the chairman of the NNPC board, is supervising his own activities as the GMD of the NNPC. Whereas the GMD is required to carry out the decisions of the board chaired by the minister, Dr. Kachukwu has become the executor and regulator of the affairs of the corporation. The Federal Government should take advantage of this crisis to put an end to the incongruity.

“In the same vein, the body established by the Petroleum Products Pricing Regulatory Agency Act to regulate the supply and distribution of petroleum products in the country is equally run by a sole administrator contrary to the provisions of the enabling law.

“Whereas the agency shall have a board of 26 members, including the representatives of the Nigeria Labour Congress, Trade Union Congress and the trade unions in the oil and gas industry, the body is run singlehandedly by the executive secretary. Despite the several calls by the Nigeria Labour Congress and other stakeholders, the Federal Government has not deemed it fit to reconstitute the board of the PPPRA.”

The lawyer added that with the perennial fuel crisis in the country, a litre of petrol was currently selling for between N200 and N300 contrary to the official price of N86.50 fixed by the minister pursuant to section 6 of the Petroleum Act.

“In an atmosphere of impunity, petroleum products are sold even though there is the Petroleum Equalisation Fund set up under the law to reimburse marketing companies for any loss sustained by them as a result of the sale of petroleum products at uniform prices throughout the country. Apart from the occasional sealing up of a few filling stations by the Department of Petroleum Resources for selling above the official price, the Petroleum Equalisation Fund has never been cautioned by the Federal Government,” Falana said.

He asked the President to direct Kachukwu to put on hold the so called reorganisation of the NNPC with a view to presenting it to the board of the NNPC whenever it is reconstituted, and called for the separation of the posts of the GMD of NNPC and the petroleum minister as envisaged by the NNPC Act.

“Furthermore, the board of the PPPRA should be reconstituted, while the PEF should be made to discharge its statutory duty of ensuring uniformity in the prices of petroleum products throughout the country,” he stated.

 

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