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Re: ‘How government can stop wasting trillions on fuel importation’ – Part 2


Continued from yesterday

It can be seen that the two, i.e., the basic price and the permitted variation, constitute the controlled price of the commodities listed in the First Schedule to the Act. This much is clear, I submit, because Sec. 18(1) of the Act defines “controlled price” as “the controlled price, wholesale or retail, fixed in accordance with Section 5 of this Act”. I submit that by virtue of Sec. 6(1) of the Act, the controlled price of a commodity under the Act is the open market price of that commodity. It provides that: “It shall be unlawful for any person to sell, agree to sell or offer to sell any or employ any other person, whether or not that other person is of full age, to sell any controlled commodity at a price which exceeds the controlled price.” (emphasis supplied). Sec. 4 of the Act is peremptory in its mandate that “price control shall continue to be imposed in accordance with this Act on any goods which are of the kind specified in the First Schedule to this Act.” (emphasis supplied).

This means that the prices of the goods listed in the Act should be controlled exclusively in accordance with the provisions of the Act, on the basis of the legal maxim expressiouniusestexclusioalterius– the express mention of one thing in a statute suggests the exclusion of others which otherwise might be reasonably implied or included. I submit that this excludes Sec. 6 of the Petroleum Act which, after all, merely empowers the Minister of Petroleum Resources to fix the prices of petroleum products.


In any event, neither statute requires the government to absorb part of the cost of the importer or local producer of petroleum products in order to reduce their open market or controlled prices. In other words, none of them requires the government to subsidize petroleum products. Both statutes were given judicial consideration by the Federal High Court, Abuja in a judgment delivered by Honourable Justice Adamu Bello (now retired) on the 19th day of March 2013 in Suit No. FHC/ABJ/CS/591/09 between Bamidele Aturu and the Hon. Minister of Petroleum Resources, the Hon. Minister of Commerce & Tourism and the Attorney-General of the Federation. In it, the court ordered the government to “fix the prices of petroleum products as mandatorily required by the Petroleum Act and the Price Control Act.” It is important to note that the court merely ordered the Government to fix – not to subsidize – fuel prices. The noun ‘subsidy’ has already been defined. The verb ‘fix’ on the other hand, in relation to prices, simply means “to make a decision in relation to a price or amount, and not allow it to change.” See Macmillan English Dictionary, 2nd edition page 563.

This judgment is currently on appeal at the instance of the Government. But it subsists and has not been set aside. Until then, it is clear that the government would be remiss not to ‘fix’ the prices of petroleum products as provided by the Price Control Act and the Petroleum Act. Given that neither of those statutes requires the Government to subsidize petroleum products, but merely to fix their prices (which don’t mean the same thing, as aforesaid) it is obvious that complying with the terms of the judgment would actually enable the government to end the current regime of subsidies in the petroleum sector, albeit fortuitously. This is because applying the parameters in Sec. 5 of the Price Control Act (as ordered by the court in Bamidele’s case) would mean passing the entire costs of production, refining and importation of fuel to the consumer at the pump – in the open market- with the Government under no legal obligation whatsoever to absorb any part of those costs. It bears repeating that in Bamidele’s case the court ordered the government to fix the prices of petroleum products in accordance with the Price Control Act: no one in his right senses will blame the government for complying with a court order.

The question now is: what would it take? A campaign of sensitization and awareness of the Nigerian public, in my view, particularly critical stakeholders such as the labour movement, petroleum marketers, transporters, etc. – as well as the constitution/composition of the Price Control Board as provided by Sec. 1(1) of the Price Control Act. By way of mitigation, the Government can waive the customs duty required to be paid on imported fuel. I submit that the only component of the Price Control Act which is open to negotiation is the profit margin of fuel marketers – to expect the Government to do more, in my view, would be asking it to bend the law to breaking point. On a final note, it is also not open to the National Assembly – for the time being, that is – to repeal or amend either the Price Control Act or Sec. 6 of the Petroleum Act, nor to designate petroleum products as essential commodities as aforesaid. This is because to do so now would overreach the Court of Appeal and present it with a fait accompli, given that those are precisely the issues submitted to the court by the Government in its appeal in Bamidele Aturu’s case as aforesaid. In other words, it would infringe on the principle of separation of powers under the Constitution.

The current practice of subsidizing petroleum products and the legal framework that underpins it is ultra vires both the National Assembly and the Federal Government under the Price Control Act, the Petroleum Act and the 1999 Constitution. Accordingly, it is invalid, null and void. Pending the determination of the appeal in Bamidele’s case (leading, possibly, to total deregulation), the way forward, in my view, is for the Government to comply with the provisions of Section 5 of the Price Control Act by periodically fixing the prices of petroleum products, in consultation with fuel marketers and other stakeholders, secure in the knowledge that doing so would not result in subsidization but, rather, its elimination. For the Government to achieve this, however, it must be resolute that under no circumstances, will it continue to bear part of the costs of importing or producing fuel, as to do so would obviously perpetuate the unwholesome status quo – apart from being manifestly illegal as aforesaid.

Sani wrote from Kano.



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