PENGASSAN Asks BPE to Halt Refineries’ Sale

Written by Duncan Thursday, 22 October 2009

From petroleum workers has come strong condemnation of the plan by the  Bureau of Public Enter-prise (BPE) to privatise the nation’s refineries and some depots of the Petroleum Products Marketing Company (PPMC). 

The workers said the privatisation programme which runs counter to the spirit of the Petroleum Industry Bill (PIB), would lead to job losses and should be halted immediately.  Group Chairman of NNPC branch of PENGASSAN, Comrade John Elibe, made the group’s views known yesterday at the second triennial delegates conference in Abuja.

“Recent newspaper publications quoting the Director-General of BPE indicate that the nation’s refineries and some PPMC depots have been earmarked for sale. The GEC (Group Executive Council) of PENGASSAN views this decision by the BPE as a contradiction of the policy direction and intention of the PIB and should be rescinded immediately,” he stated.

He hailed the positive aspects of the PIB.

“This bill has the potential to positively transform the oil and gas industry into a competitive and robust sector that will be the envy of others in the world,” said Elibe. Continuing, he stated: “While we remain opposed to the sale of any refinery or depot, we are anxiously looking forward to the passage of the bill and its eventual implementation.”

He suggested the NNPC needs to be given a free hand to choose a partner that would help it run the refineries efficiently just as one of its subsidiaries, the Nigerian Petr-oleum Development Company (NPDC), did by partnering Agip.

The PIB provides that NNPC’s assets will be used by the company as collateral to enable it raise funds from the money and capital markets.   

President of PENGASSAN, Comrade Babatunde Ogun, explained that while they were not averse to deregulation of the downstream sector of the oil industry, they “vehemently reject an import-driven deregulation”.

In his speech presented by the Deputy President, Mustapha Wali, Ogun said their support for deregulation was based on the need to ensure free and uninterrupted flow of petroleum products in the country and the creation of jobs for the unemployed.

“The state of infrastructure of crude/products pipelines, roads, rails, etc. that would be the effect of import-parity deregulation and facilitate products availability across the country is a key concern.

“We need that enabling policy environment that would make downstream operators embrace the downstream liberalisation policy and work within a reasonable time frame. The ultimate goal of ruling out importation of petroleum products as a thing of the past must be given a serious focus with time frame," he said.

According to him, government “is not ready for deregulation” at this moment because all “our concerns” that had been raised at various fora had not been addressed. He listed the issues as functional refineries, pipeline vandalism, expansion, expansion and upgrading of the Atlas Cove facilities to allow easy evacuation of products, and palliative measures for Nigerians.

The PENGASSAN boss called for a review of the import-parity template of the Petroleum Pricing Regulatory Agency (PPRA) to be benchmarked with the local refining cost template in order to assuage the effects of the inherent market fundamentals and to attract more players to the downstream business.
He declared that it is inexcusable that Nigeria is the only major oil producing country in the world that is unable to achieve self-reliant petroleum products refining.

Group Managing Director of NNPC, Sanusi Barkindo, admitted that the corporation was at a crossroads, but said the PIB would rectify the situation where the joint venture partners, the International Oil Companies (IOCs) owned 80 per cent of the oil produced by allowing Nigerians to be the dominant operators.

Represented by the Group Executive Director, Refining and Petrochemi-cals, Mr. Austin Oniwon, Barkindo explained that deregulation would also correct the situation where investors pay for crude oil at international price only to sell the refined products at regulated prices, which had stalled the growth of the sector as it was a disincentive to investment.