Not done with its previous oil sector agenda for the new President, Muhammadu Buhari, oil workers under the aegis of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has gone a step further by calling for increased local production as against importation before embarking on deregulation.
Boost local refining
They argued that if local refining was not increased to meet local demand for petroleum products especially the premium motor spirit (petrol), removing subsidy on petroleum products would result to more hardship. According to the association, removing subsidy while the country depends on importation of refined products will make prices of refined petroleum products to be out of the reach of the masses and cause inflation. The trade union maintained that importation of refined petroleum products was a major drain on the nation’s revenue, adding that it creates jobs for the refining nations in spite of the high unemployment rate confronting Nigeria. “Importation of refined petroleum products is also putting the Naira under undue pressure and creating social problems for the economy. This is unacceptable to PENGASSAN.
Subsidy
“Abrupt removal of fuel subsidy will create chaos that may ground the economy. PENGASSAN calls for well-coordinated measures with timeline to achieve self-sufficiency in local refining as a means of proffering acceptable steps to end fuel subsidy. “This should be combined with such other measures for effective optimisation of gas especially for domestic, industrial, electricity and automotive energy. Such will create other affordable and friendly sources for energy needs.” The union called on the government to declare a state of emergency in the downstream oil and gas sector and convene an all-stakeholders forum to come up with concrete and sustainable steps with reliable timeline for achieving demandsupply equilibrium through local refining. The strategy must be to guarantee a total stoppage of both petroleum products importation and fuel subsidy.
He noted that Nigerians expect that relying on the resources that the nation is endowed with; the country should be able to provide refined products at reasonable and affordable prices to the populace, adding that this could have been possible if local refining capacities are enhanced. The union said, “Government is thus persistently confronted with import parity pricing and the burden of subsidising the imported fuel instead of locally refined products. As an important stakeholder in the sector, we oppose the petroleum products importation regime, which is rent seeking and indeed a drain devise that is inimical to our economic and social empowerment. “It is affecting our self-dependence and means of job creation. Thus, we maintain our unwavering belief in local refining.”
Privatisation
“PENGASSAN maintains strong objection to the privatisation of State-owned Refineries as the OPEC principle is being cautiously guided by other OPEC member countries.” PENGASSAN and other unionists had earlier called on the new government to declare a state of emergency in the oil and gas sector of the economy to address the plethora of issues bedeviling the sector. They argued that all subsectors of the oil and gas industry were going through one problem or currently drawing down the entire economy. The President of the association, Comrade Francis Johnson, said that there were many issues, which required urgent attention from the incoming government to reposition the industry for efficient and effective delivery of its benefits to Nigerians.
Stakeholders’ input
He advised the new government to call an all-inclusive stakeholders’ forum of those involved in operations in the sector to critically examine and proffer workable and enduring solutions to all the problems in the larger interest of the Nigerian nation. He said, “All the subsectors of the oil and gas industry have one challenge or the other and all these challenges are affecting the deliveries of the benefits of our God-given hydrocarbon resources to the country and the entire people of Nigeria. “These challenges are as result of past neglects, wrong policies and policy summersault in some areas of the subsectors. All these are inflicting pains on Nigerians who ought to be enjoying the benefits of the natural resources that God bequeathed to the country.”
Challenges
He listed some of the challenges to include pipeline vandalisation, crude oil theft, state of the refineries, intractable and persistent scarcity of petroleum products, subsidy payment controversies, divestment, illegal transfer or allocation of oil blocks, irregular Joint Venture (JV) funding with emphasis on delay in cash call payment, inadequate funding of government agencies in the oil and gas sector and undue interference in the management of government agencies.
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