HomeBUSINESSBUSINESS UPDATESFalana - NNPCL Fixing Fuel Price Is Illegal, Contemptuous

Falana – NNPCL Fixing Fuel Price Is Illegal, Contemptuous

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Human rights lawyer Femi Falana, SAN, criticised the Nigerian National Petroleum Company Limited for its adjustment of the pump price for Premium Motor Spirit (PMS), or petrol, from around N500 to N617 per litre.

Falana was reacting to the NNPCL’s seemingly overnight price hike on Tuesday, which saw the second impromptu petrol price review in under two months — coming from a ballpark price of N185 in May.

In a statement on Wednesday, the Senior Advocate of Nigeria noted that President Bola Tinubu, in his inaugural address in May, announced that his administration would govern the country in accordance with the rule of law.

He cited a Federal High Court judgement which held that by the combined effect of the Petroleum Act, Price Control Act and the Constitution the Federal Government “must always fix the price of petroleum products sold across Nigeria.”

According to him, the Federal Government was dissatisfied with the judgement of and filed an appeal at the Court of Appeal.

“Even though the appeal has not been determined the Nigerian National Petroleum Corporation Limited has usurped the power of the Federal Government to determine and fix the prices of petroleum products in the country,” Falana said.

“It is undoubtedly clear that the action of the NNPCL is illegal and contemptuous since the judgment of the Federal High Court on the subject matter has not aside by a higher court.”

See the full statement below:

NNPCL LACKS POWER TO FIX PRICE OF PETROL

In his inauguration address delivered on May 29, 2023, President Bola Tinubu announced that his administration would govern the country in accordance with the rule of law. The implication of the commitment is that the actions of the Government and its agencies will be carried out under the law. The people of Nigeria were taken aback yesterday when the Nigeria National Petroleum Corporation Limited increased the pump price of petrol from N500 to N617. After increasing the price the NNPCL turned round to claim that it was fixed by market forces. It is submitted that the increase of the pump price of petrol by the NNPCL is is an affront to the rule of law on the ground that it is illegal in every material particular.

In Bamidele Aturu v Minister of Petroleum Resources
(Suit No FHC/ABJ/CS/591/2009), the Plaintiff challenged the plan of the Federal Government to deregulate the downstream sector of the petroleum industry and allow market forces to determine the prices of petroleum products. In a landmark judgment delivered on March 19, 2013, the Federal High Court, presided over by Adamu Bello J. (as he then was) held that by the combined effect of the Petroleum Act, Price Control Act and the Constitution the Federal Government “must always fix the price of petroleum products sold across Nigeria.”

Specifically, the reliefs granted by Federal High Court include the following:

“1. A DECLARATION that the policy decision of the Defendants to deregulate the downstream sector of the petroleum industry by not fixing the prices at which petroleum products may be sold in Nigeria is unlawful, illegal, null, void and of no effect whatsoever being in vicious violation of the mandatory provision of section 6 of the Petroleum Act, cap P.10, Laws of the Federation of Nigeria, 2004.

“2. A DECLARATION that the policy decision of the Defendants to deregulate the downstream sector of the petroleum industry by not fixing the prices at which petroleum products may be sold in Nigeria is unlawful, illegal, null, void and of no effect whatsoever being in flagrant violation of the mandatory provision of section 4 of the Price Control Act, cap P28, Laws of the Federation of Nigeria, 2004.

“3 A DECLARATION that the policy decision of the Defendants to deregulate the downstream sector of the petroleum industry by not fixing the prices at which petroleum products may be sold in Nigeria is unlawful, illegal, null, void and of no effect whatsoever being in conflict with Section 16(1)(b) of the Constitution of the Federal Republic of Nigeria, 1999 which provides that the Government shall control the national economy in such manner as to secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equality of status and opportunity.

“4. A DECLARATION that that the policy decision of the Defendants to deregulate the downstream sector of the petroleum industry by not fixing the prices at which petroleum products may be sold in Nigeria has the effect of making the freedom of movement guaranteed in section 41 of the Constitution of the Federal Republic of Nigeria, 1999 illusory for the Plaintiff and the generality of Nigerians and is therefore illegal, unconscionable and unconstitutional and of no effect whatsoever.

“5. AN ORDER restraining the Defendants their agents, privies, collaborators and whosoever and howsoever from deregulating the downstream sector of the petroleum industry or from failing to fix the prices of petroleum products as mandatorily required by the Petroleum Act and the Price Control Act.”

Dissatisfied with the judgment of the Federal High Court the Federal Government filed an appeal at the Court of Appeal. Even though the appeal has not been determined the Nigerian National Petroleum Corporation Limited has usurped the power of the Federal Government to determine and fix the prices of petroleum products in the country. it is undoubtedly clear that the action of the NNPCL is illegal and contemptuous since the judgment of the Federal High Court on the subject matter has not aside by a higher court.

It ought to be pointed out that the NNPCL is no longer an agency of the Federal Government but a limited liability company which is regulated by the Nigerian Upstream Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority in charge of the petroleum industry. The action of the NNPCL has confirmed that the company has continued to exercise monopoly in the importation and distribution of petrol in the country contrary to the letter and spirit of the Petroleum Industry Act, 2021. Having liberalised the petroleum sector the NNPCL lacks the power to fix the prices of petroleum products in any part of Nigeria. It is high time that the NNPCL was restrained from further fixing the prices of petroleum products in the country.

Femi Falana SAN,
The Chair, Alliance on Surviving Covid 19
and Beyond (ASCAB).
July 19, 2023

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