A Review of the Nigerian Energy Industry

Removal of subsidy’ll ground economy – PENGASSAN

Petroleum imports
Petroleum imports

*Oppose plans to privatise refineries
*Says Buhari should declare state of emergency in oil industry

Oscarline Onwuemenyi

03 June 2015, Sweetcrude, Abuja – Oil workers, under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria, on Tuesday opposed any proposal by the Nigerian Government to privatize any of the country’s refineries.

According to a statement made available to our correspondent in Abuja, and signed by the spokesperson of PENGASSAN, Emmanuel Ojugbana, said any attempt to remove subsidy, while the country continues to depend on importation of refined products would push fuel prices beyond the reach of the poor masses as a result of inflation.

He stated that, “Abrupt removal of fuel subsidy will create chaos that may ground the economy. PENGASSAN calls for well-coordinated measures, with timelines, to achieve self-sufficiency in local refining as a means of proffering acceptable steps to end fuel subsidy.”

Ojugbana, said the Federal Government must ensure that the deregulation policy in the downstream sector of the country’s petroleum industry was not based on importation of petroleum products.
Rather, he said, the government should focus on efforts to raise the local refining capacity of the four refineries to ensure that deregulation policy was successful.

“If local refining is not increased to meet local demand for petroleum products, especially the premium motor spirit (petrol), removing subsidy on petroleum products will bring more hardship on Nigerians,” the senior staff union said.

Reiterating the union’s opposition to the continued dependence on importation of refined petroleum products, which the oil workers described as a major drain on the nation’s revenue, Mr. Ojugbana said making the refineries work would help create jobs in the face of high unemployment rate in the country.

“Importation of refined petroleum products is also putting the Naira under undue enormous pressure and creating social dislocations for the economy. This is unacceptable to PENGASSAN,” Mr. Ojugbana stated.

He said the arrangement should incorporate other measures for effective optimization of gas supply, especially for domestic, industrial, electricity and automotive energy, adding that this would create alternative, affordable and friendly sources for energy needs.

While urging the government to declare a state of emergency in the downstream sector of the oil and gas sector, Mr. Ojugbana also called for an all-stakeholders forum to be convened to enable Nigerians discus ways for achieving demand-supply equilibrium through local refining, including reliable timelines.

Although the PENGASSAN spokesperson noted the constant yearnings by both government and industry operators to promote competition and efficiency, Mr. Ojugbana said both failed to say clearly how to enhance local refining capacity to satisfy local fuel demand.

He said what government had consistently been confronted with was importation of fuel with parity pricing and the burden of subsidizing retail price, instead of locally refined products.
Mr. Ojugbana said PENGASSAN was opposed to petroleum products importation, describing it as a drain devise inimical to the country’s socio-economic empowerment.

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