Govt reverses self to avert oil workers strike
The Presidency yesterday denied that there are plans to sell any of the four refineries in the country.
The denial is to forestall a strike by unions in the oil industry, who are opposed to the plan.
Special Adviser to the President on Media and Publicity, Dr. Reuben Abati, in a statement in Abuja said there was no basis for the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, and the National Union of Petroleum and Natural Gas Workers, NUPENG, to embark on strike as government has no intention of selling the refineries.
But the denial contradicts the disclosure of the Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, who in a recent interview with Bloomberg TV Africa in London had said that the refineries would be sold.
“We would like to see major infrastructure entities, such as refineries, moving out of government hands into the private sector. Government does not want to be in the business of running major infrastructure entities and we haven’t done a very good job at it over the years,” Alison- Madueke had said.
But Abati explained that the Federal Government was not considering selling the refineries and appealed to PENGASSAN and NUPENG to drop the idea of embarking on strike.
“Government is not going to sell any refineries. There is no such plan and there is no presidential approval for such. Nobody, not even the minister of petroleum has powers to sell any government property,” he said.
The four refineries are located in Warri, Kaduna and Port Harcourt with a combined capacity of 445,000 bpd.
It would be recalled that a presidential audit of the refineries, led by a former Minister of Finance, Kalu Idika Kalu recommended that they be sold off, due to inadequate government funding and sub-optimal performance.
In a related development, the Ministry of Petroleum Resources also yesterday dismissed speculations that the Federal Government plans to increase pump price of petrol through a full or partial withdrawals of subsidy.
Permanent Secretary in the ministry, Mr. Danladi Kifasi, said this in a statement made available to National Mirror in Abuja.
He said that government had no plan to increase the pump price of Premium Motor Spirit (PMS) from the prevailing price of N97 per litre.
The Permanent Secretary dismissed fears in some quarters about an impending price hike describing it as “unfounded”.
“We would like to appeal to oil marketers to refrain from the hoarding of petroleum products and the general public from panic buying in anticipation of any increase in pump price.
“It is equally important to state that neither the Federal Ministry of Petroleum Resources nor any of its parastatal is under any instruction to activate a new pump price regime as being speculated,” he said.
Kifasi further warned petroleum product marketers to desist from creating any scarcity so as to induce panic in the system in order to exploit unsuspecting members of the public.
“The relevant agencies of government including the Department of Petroleum Resources, DPR, and the Economic and Financial Crimes Commission, EFCC, have been directed to deal with offenders,” he said.
Kifasi assured that the government had made enough arrangements to ensure that the entire nation remains “wet” with petroleum products round the clock in 2014 just as it has been the practise in the last three years.
President Goodluck Jonathan had in March, said that the Federal Government would still remove fuel subsidy, even after a sudden removal in 2012 triggered public outrage.
He had, however, said that government would first discuss the proposal with Nigerians before removing the subsidy.
Giving reasons at that time he had said: “We cannot continue to waste resources meant for a greater number of Nigerians to subsidise the affluent middle class, who are the main beneficiaries (of fuel subsidy).
“We believe that as we progress, government is going to continue to enlighten Nigerians on the need to remove fuel subsidy.”
Government had suddenly announced the total removal of subsidy on petrol on January 1, 2012 with pump prices rising to N141 per litre up from N65.
The action triggered massive weeklong nationwide protests forcing the government to partially return the subsidy and reduce petrol price from N141 to N97 a litre.
If the subsidy were to be removed today, petrol price would jump to N143.63 per litre based on the current Petroleum Products Pricing Regulatory Agency, PPPRA, template.
PPPRA statistics showed that government’s subsidy, which stood at N53.53 per litre in September has fallen to N46.63 per litre.
The latest pricing template of the agency indicates that the landing cost, including cost and freight, traders’ margin, lightering expenses, NPA, financing, jetty depot throughput charge, and storage amounted to N128.14.
It stated that distribution margins, including monies due to retailers, transporters, dealers, bridging fund, marine transport average and admin charge amounted to N15.49.
The PPPRA, which puts ex-depot price at N81.51, stated that these expenses increased the total cost of the product to N143.63 per litre.
This means that the government’s subsidy is N46.63 per litre because the price of the product remains pegged at N97 per litre.
Current information indicates that total petrol subsidy bill dropped from over N1.9 billion recorded in September to N1.6 billion in December based on the estimated daily consumption of 36 million litres.
Investigations showed that the major and independent marketers have started preparing their fourth quarter subsidy claims for submission to PPPRA for settlement.
While the major marketers, including Oando, Forte Oil, MRS, Mobil, Total and Conoil were paid for the first, second and third quarters of 2013, others, including the independents have not been paid.
Some hawks in the Federal Ministry of Finance still believe that the subsidy should go, but the Jonathan administration, fearful of a political backlash ahead of the 2015 elections has been forced to maintain the status quo.
Stringent verification procedures for the payment of fuel subsidy and a crackdown on fraudulent importers have reduced the corruption in fuel import and subsidy payment programme over the past one year.
The planned privatisation of the refineries and expectations of new investments to increase local refining capacity would bring an end to fuel importation, long considered as a national embarrassment.