A Review of the Nigerian Energy Industry

Lack of support by labour stalls refineries’ sale

03 March 2015, Lagos – The Federal Government may have slowed down the process of selling the nation’s refineries following its failure to secure the support of labour unions.

Port Harcourt refinery.
Port Harcourt refinery.

The government had in 2013 announced plans to sell the nation’s four refineries. The refineries are the Port Harcourt Refining Company Limited I and II; Kaduna Refining and Petrochemical Company Limited; and Warri Refining and Petrochemical Company Limited.

Although labour opposed the move, President Goodluck Jonathan had in December 2013 approved the constitution of a steering committee for the privatisation process.

The members of the steering committee chaired by the Minister of Petroleum Resources, included the ministers of Finance, Power, Labour and Productivity, National Planning, Mines and Steel Development and Justice and Attorney General of the Federation.

Others were the Chairman, Extractive Sub-committee of the National Council on Privatisation; Special Adviser to the Vice President on Economy; Group Managing Director, Nigerian National Petroleum Corporation; Director-General, Bureau of Public Enterprises; Group Executive Director (Refineries), NNPC; Managing Directors of the refineries; and Director, Oil and Gas, BPE, who was slated to serve as the secretary.

Although the BPE had listed the sale of the four refineries in its work list for 2014 after securing the approval of the National Council on Privatisation, the agency said the deal would only happen when the government secured a buy-in from the organised labour.

In a telephone interview with our correspondent in Abuja on Monday, the General Secretary, Nigeria Labour Congress, Dr. Peter Ozon-Eson, said the organised labour remained opposed to the sale of the refineries and indicated the failure of the government to obtain its support.

Ozon-Eson said, “We remain opposed to the sale of the refineries. Our position is that the refineries should be made to work. Government should also open up the downstream sector of the petroleum industry. Private investors should be able to build their own refineries.

“Sometimes, what you call privatisation is just an arrangement. The corporations that have been privatised do not give us much to be happy about. You can see what is happening in the power sector today.”

A source at BPE indicated that work on the proposed sale of the refineries had slowed down but added that the agency was working on the sale internally.

The terms of reference of the steering committee included advising the NCP on the best way to privatise the refineries in a manner that would enhance the gains of the privatisation programme; and reviewing the diagnostic reports and recommendations of the transaction advisors.

Others were to propose modalities and make recommendations to the NCP on labour matters to ensure the successful privatisation of the refineries; oversee the process and make recommendations to the council for the successful privatisation of the refineries; and to carry out any other ancillary activities relevant to the attainment of the goals of the Federal Government in the reforms and privatisation of the nation’s refineries.

The immediate past Minister of Information, Mr. Labaran Maku, had explained that the Federal Government deferred the proposed sale of the refineries in order to ensure the stability of the political environment.

Maku said although the Federal Government believed in the tremendous benefits of privatising the refineries to the Nigerian economy, a decision on the sale had to be taken when critical stakeholders come to agree on the need for the action.

– Punch

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