Deregulation, antidote to excessive looting —Oluleye

Dr Oluwole Oluleye is the pioneer Executive Secretary of the Petroleum Products Pricing and Regulatory Agency (PPPRA) established in 2003. He is also a former Executive Secretary of the Petroleum Trust Development Fund (PTDF). The Ekiti-born, United States-trained technocrat takes DARE ADEKANMBI through his career, issues of deregulation, subsidy, among others. Excerpts:

FOR the benefit of the young generation of Nigerians who might be inspired by it, could you let us into the early part of your life, education and so on?

I was born about sixty four years ago to a seamstress mother, the late Felicia Olajumoke of Ile Araba Ife-Odan in the present Osun State, and a school headmaster father, the late James Johnson Oluleye, of Aaye Quarters in Efon Alaaye in the present Ekiti State. My mother later became a successful homemaker (by virtue of raising her seven children to be graduates and several other relatives who lived with us) and my father later joined the Nigerian Army and rose to become a Major General, and later a Federal Commissioner for Establishment and Service Matters, as well as the Finance Commissioner.

My father wanted me to study law whereas my interest was in Agriculture and specifically Animal Husbandry. My father was a stern disciplinarian and brooked no nonsense and it was difficult to approach him. He commanded and you obeyed. God directed the Late Mrs Omololu, a matron at the University College Hospital (UCH) and wife of Prof Omololu of the Nutrition Department at the University of Ibadan in the 1970’s to prevail upon my father to allow me study what I had interest in.

You did not study petroleum or chemical engineering, how then did you come about working in agencies that have to do with fuel and its related activities?

I told a colleague who had also been sidelined in his earlier place of work, for speaking the truth about some adulterated fuel imported into the country, before being made a Special Assistant to the Secretary to the Government of the Federation.

Within two weeks, he called me of the setting up of a high-powered Presidential Committee to be known as the Special Committee on the Review of Supply and Distribution of Petroleum Products. The late Chief Rasheed Gbadamosi was named the chairman. He had the unenviable task of guiding the motley crowd of technocrats in their respective callings, to make a meaningful headway in achieving the terms of reference of the committee. The other key person guiding the committee was Engineer Funso Kupolokun, who was at the time, Presidential Adviser on Petroleum. It was at the feet of this highly cerebral personality that I equipped myself with the technical nuances of the black gold as well as the complexity of the oil industry. This marked the beginning of my divine romance with the oil industry.

Was that how you came to be appointed as the first Executive Secretary of PPPRA?

When the Petroleum Products Pricing Committee (PPPRC) was set up in February 2001, I was made the Deputy Secretary to assist Mr. Solomon Matankari who was the secretary. While working late in the evening, the Permanent Secretary (Political) in the SGF Office, Dr. Hakeem Baba Ahmed walked into my office and asked what I was doing so late. I replied that I anticipate we might be asked to adjust petroleum prices early in the New Year based on the white paper on the Committee’s Report. He then said I should give him my resume the next morning. This he accomplished through the SGF and I was made the Acting Secretary to the PPPRC.

Once appointed, I immediately set out to work on a bill to transform the PPPRC to an agency of government. In January 2002, petroleum products prices were adjusted and this caused a lot of problems with the organised Labour and Civil Society groups. The Labour Unions had, in the year 2000, submitted a minority report to government opposing any form of price adjustments. It was therefore not surprising that they went on strike. From my experience in Labour Unionism, it would have been out of place for any labour leader to support deregulation. On the other hand, I held the sacred belief that deregulation remains a major way of stopping the bloody hemorrhage of Nigerian finances. This was the target we were jointly determined to achieve, given the misplaced general belief that petroleum products should be sold so cheap since that is the only value the populace derives from government.

So, when the Act establishing PPPRA was signed into law in May 2003, then President Olusegun Obasanjo approved my appointment as PPPRA Executive Secretary the month after.

The issue of subsidy generated a lot of controversy during your headship of the agency. What actually happened?

There were so many strikes from 2002 as we sought to reduce the gap between the market price and the domestic capped price. In order to alleviate the problem and for government to pay for the difference, President Obasanjo set up a Price Support Fund to mitigate the effect of petroleum products price increases. The crude oil future market pointed to continued increase in prices, meaning that the country would gain in terms of revenue from the sale of crude but lose it through non market related domestic petroleum products prices.

Under the guidance of the late Chief Gbadamosi, we set out the guidelines for the operations of the fund taking cognizance of the various reports we had been part of and deregulation of the downstream petroleum sector being the ultimate objective. The Price Support programme began in January 2006 with the major marketers that believed in the deregulation programme and also because of their being responsible corporate entities. It was also easy to track their various activities. In spite of our not paying for products imported for close to one year, they kept on bringing products to supplement what NNPC was producing from the refineries and their imports.

In that same year, some marketers were getting agitated that the programme was being opened to other marketers and therefore tried to sow the seeds of discord and initiation of a monopoly. They sought to have certain marketers owed and others that had investments in the downstream not to be brought into the programme.

The Petroleum Support Fund was just a means towards a full deregulation of the downstream sub-sector. The dictum is free entry and exit and the dismantling of barriers. We could not be propagating this and also contradicting ourselves by erecting barriers to entry.  We only kept a number of marketers that we could manage because of our staff strength and to make sure the ports were not clogged up with imports. We also gave full vessel load of products in order to have economy of scale and to ensure that products were got from certified international traders. Opening up the Fund to other marketers was also to ensure that Nigeria had a pool of traders so that when we become the hub of petroleum products supply in Africa we would not need to import experts.

Did you encounter any opposition from entrenched interests in the oil industry who might be uncomfortable with the reforms you were doing then?

I did encounter a lot in that regard. In May 2008, a marketer came to my office to intimidate me and said the president said I was corrupt and that the agency was a cesspool of corruption. I retorted that he needed to prove his assertion, since all payments made and volume of products supplied were all on the agency website for public accessibility.

In August of the same year, two EFCC officials came into my office, inviting me to see them in their office the next day. I asked for what they would want to know from me so I could bring the documents, but was told there was no need. I went as scheduled and realised there was a petition against me from questions being asked. Two of my officers were also invited along with me. We were interrogated in separate rooms and we had to give answers from memory. We were later let go and did not think much of it because the processes for verification of products volume of imports and payments were rigorous and effectively supervised. As a matter of fact, there was no problem in the programme and looking back today; it was a deliberate attempt to disrupt the system and cause confusion, which had resulted into what we have today.

What were you specifically accused of in the petition?

Part of the accusation was that I ‘stole’ N64 billion and that I gave Texaco and NIPCO allocations. For the avoidance of doubt, NIPCO had the most modern facilities for distribution of products in Nigeria. The company had been lying idle and we felt it would considerably ease the distribution of products across the country, as most of its clients are independent marketers spread in the nooks and crannies of the country. I was also accused of having shares in the company. Several marketers were called and I guess they attested to the fairness and transparency of the Agency in discharging its statutory undertakings. Operationally, marketers got allocations that they had proven capacity for and payments were made immediately the CBN account is credited and this was done within 24hours.

Did that lead to your suspension?

When it appeared the EFCC was not going with their script, I was suspended with two of the officers and our salaries and emoluments cut off without being either interdicted or proven guilty. Later the EFCC came into our homes for a search of the rooms and premises. I was totally deflated and felt like a common criminal for trying to serve my country diligently.

I was again invited alongside my colleagues by the EFCC. This time, they asked some more questions and then asked us to go. Later in November the Punch newspaper of November 11, 2008 gave some details about the findings, literarily exonerating and praising us for not allowing the control of the Agency by a cabal. They could see through the machinations of the petition writers. Today, I do not know the petition writer or writers, but the oil industry personnel knew them by their utterances.

After the last report to the president, we were left in a limbo. Close aides of the president called me that he had approved that we be returned to office but we never got any letter.

On November 2, 2009 President Umaru Yar’adua directed that I be paid all my entitlements from the day I was suspended and another position found for me. I remain grateful to the late president for my rehabilitation. God again later used President Goodluck Jonathan, as Acting President in March 2010, to finally restore me to life by appointing me as a Member and Secretary of the Presidential Projects Assessment Committee (PPAC). I voluntarily tendered my letter of retirement from service, with 18 months left on my retirement age.