Why Abuja Court declared deregulation of petroleum sector illegal

The judge ruled that the government must fix the price for petroleum products.

The Federal High Court, Abuja, on Tuesday declared as unconstitutional, illegal, null and void the controversial proposal by the Federal Government to deregulate the prices of petroleum products in Nigeria.

Presided over by Justice M. Bello, the court made the pronouncement in the case broughtby Bamidele Aturu against the Minister of Petroleum Resources, Diezani Alison-Madueke, and the Attorney General of Federation and Minister of Justice, Mohammed Adoke. Mr. Aturu argued that the government must resolve to fix prices of petroleum products.

The judge’s ruling, based on the plaintiff’s application, is largely determined by the Petroleum Act of 2004.

In delivering his judgment, Mr. Bello, who granted all the six reliefs sought by the applicant, said government’s policy of deregulation of the downstream sector of the petroleum industry, by not fixing the prices petroleum products may be sold in Nigeria, is unlawful and a vicious violation of the provision of section 6 of the Petroleum Act, cap P.10, Laws of the Federation of Nigeria, 2004; and section 4 of the Price Control Act, cap P28, Laws of the Federation of Nigeria, 2004.

Mr. Aturu, in his application, had sought the court’s declaration that the policy was in conflict with Section 16(1) (b) of the Constitution of the Federal Republic of Nigeria, 1999, which provides that “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.”

He added that the implementation of the policy was “illegal, unconscionable and unconstitutional and of no effect whatsoever”, as it is capable of making the freedom of movement guaranteed in section 41 of the Constitution of the Federal Republic of Nigeria, 1999 illusory for the generality of Nigerians.

In demanding an order restraining the government, through any of its agents, privies, collaborators, from deregulating the downstream sector of the petroleum industry or failing to fix the prices of petroleum products as mandatorily required by the Petroleum Act and the Price Control Act, Mr. Aturu asked the court to direct government to fix and publish regularly the prices of petroleum products forthwith.

The judge granted all the plaintiffs request include the last which is “an order directing the defendants to fix and publish regularly prices of petroleum products forthwith.”

In his reaction shortly after the judgment, Mr. Aturu, commended the judge for “his unparalleled erudition and sound logic” and the Nigerian people for the “confidence in the rule of law.”

“The sound and logical treatment of the issue of locus standi raised by the defendants reassures us that the judiciary, without doubt, cannot be wholly dismissed in the struggle to build genuine democracy. The judge has done his own bit. It is now left for Nigerians to be alert to challenge any wicked increase in the prices of petroleum products,” he said.

Albert Ekop, an Abuja-based public affairs analyst described the declaration by the court as patriotic, pointing out that the issue of deregulation of the downstream sector has been misconstrued by government as synonymous to endless fuel price adjustment, adding that government needs to sit down to review the policy and allow it work like in other climes if it must be adopted in Nigeria.

Deregulation is a cardinal policy of the Federal Government aimed at divesting government’s restrictions and monopoly in the management of the economy by allowing interplay of market forces of demand and supply to determine prices of commodities.

Though the Federal Government has always assured that deregulation of the downstream sector of the oil industry would limit government to the role of providing regulatory oversight, it has however failed to take concrete steps to guarantee the removal of consumers’ exploitation by creating the enabling environment for uninterrupted supply of petroleum products. The government has also argued that deregulation is a permanent way to put a stop to the corruption in the fuel subsidy regime.

Some of the conditions that would ensure effective deregulation policy analysts have said, include the rehabilitation of the nation’s four refineries and construction of new ones to eliminate products importation, which has been a major source of corruption over the years.


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