A Review of the Nigerian Energy Industry

Privatisation:The looming war over refineries

Diezani Alison-Madueke 122 December 2013, Lagos – Crisis is brewing between the Federal Government and oil workers under the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and National Union of Petroleum and Natural Gas Workers (NUPENG) as the two unions have vowed to embark on a nation-wide strike following the move by government to privatise the nation’s four refineries in Kaduna, Port Harcourt and Warri by first quarter of 2014.

Speaking in Lagos, the PENGASSAN President, Comrade Babatunde , warned that the unions would go on strike by the first week of January 2014, if government goes ahead with the sale of the four refineries to private investors.
His words: “Government deliberately under-funded the refineries and refused to carry out TAM just to have reasons for selling them off to their cronies.

Rather that outright sale of the plants, government should adopt a modified process tailored towards the Nigerian Liquified Natural Gas (NLNG) model with the National Oil Company (NOC) as owners of the four refineries, holding a substantial minority shares while core investors hold the working majority with the staff, trade unions, and the host communities holding minority shares.

“Government must put measures in place to tackle the problem of pipelines vandalism, which hampers effective supply of crude oil to the refineries. The proposed sale of the refineries is against the overall national interest but in the interest of a few. Selling the plants is not the solution to importation of refined petroleum products but building more refineries to meet the demand of local consumption and for export trade.”

Meanwhile, a former National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Tunji Adedeji, advised government not to back out of it plans to sell the refineries despite opposition from the unions, stressing the urgent need for the plants to be privatised to increase productivity in the sector.

Adedeji told Sunday Vanguard at the weekend, “I am in support of government’s plan to privatise the refineries by selling those plants to private investors who have the technical-know-how and effective managerial structure to run them for optimum production as well as revenue generation for the economy. Privatising the refineries will serve the country better in export of refined petroleum products and beyond.”

He continued, “Aside from selling the existing plants, private investors must also be encouraged to build refineries across Nigeria. Doing so will create more jobs for the citizens, especially the youths.”

– Udeme Clement, Vanguard

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