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Why govt can’t deregulate now — Comrade Peter Akpatason

By Victor Ahiuma-Young, Moses Nosike & Dania Onosure

A recent report revealed that the Federal government has commenced negotiation with leaders of the oil workers’ unions over the planned total deregulation of  the downstream sector of the petroleum industry. President of the National Union of Petroleum and Natural Gas Workers (NUPENG), Comrade Peter Akpatason in a chat with Saturday Vanguard Business, speaks on this amongst other issues.
Excerpts.

There was a report that leaders of oil workers have started negotiation with government over the planned deregulation of the downstream sector of the petroleum industry . How far have you gone with this negotiation?
We are not negotiating with the government. We actually attended a consultative meeting , a  stakeholders meeting,  including marketers and other players of the industry.   The whole essence of  that is that we have been hearing a lot of pronouncements on radio, television and the other arms of the press. But there is no time that any formal position was made known to the unions as to how they are going about whatever policy they have proposed. You will recall that earlier,we had a meeting with them .

We told them that they must talk to the marketers, NLC and other stakeholders. We told them that we could favourably look into the  option of deregulation to know if certain conditions are met but since that moment, we have not heard any thing from anybody.Rather, we are hearing uncoordinated pronouncements  from different people  that they are  planning to deregulate. In fact, it got to the extent that  they have even got a time frame without actually discussing with other stakeholders :labour, marketers, depot owners and potential refinery investors, importers and all the rest of them. So, the occasion that you are referring to is the consultative meeting.

We were invited by Nigeria National Petroleum Corporation (NNPC). Of course,  we met other people there.  They told us what their plans are, they told us the constraints they have identified and what they were doing about the challenges. However, we  are not satisfied that up till this moment, they have not done  sufficient consultation. They have not been able to convince us that deregulation of priceswould  promote competition which will ultimately improve the growth of the industry and ensure availability of products which also in the long run   should  add positive values and make the products available to Nigerians at affordable prices.

We have set out some conditions that  should  be met before anybody can  convince us  about  deregulation.  We are yet to see any serious effort by any body  to try and  address these conditions. Remember ,we talked about the existence of a cartel.  If you are deregulating, you are moving from a regulated market, a controlled market to a free market.

Comrade Peter Akpataso: Explains the dangers of deregulating now
Comrade Peter Akpataso: Explains the dangers of deregulating now

A free market is the one that is freely operated by the forces of demand and supply. But in a market that cartel exists, where forces of demand and supply are manipulated by such cartel, there can be no deregulation.  Secondly, we will be very positive about the option of deregulation if it is hinged strictly on local refining.  If its objective is to promote local refinery, then definitely, we are for it. But as it stands now, what we are seeing  is just an import- oriented policy and we believe  that is not going to be in the interest of Nigerian people.   We have also seen a lot of bottle-necks here and there that needed to be addressed before one can be convinced that if they go the line they are going, the way they are going, there might be some positive out come. But as it stands now, before one can be convinced that if they go the line they are going, the way they are going, there might be some positive out come. But as it stands now, none of those things have been positively addressed.

We talk about the dredging our coaster waters, that has not been done, because presently, a lot of the elements in the pricing which is their own bench mark, are actually avoidable elements, like demurrage.  It is not our fault that ships can not get here on time and off load on time. It is not our fault that the refineries are not working. There is an amount of money that we pay for pipeline maintenance, and no pipelines is being maintained.  There are others like the inadequacies of receptive facilities, distributing facilities, these are major issues that should be addressed. If they do proper dredging,  if they are able to replicate the kind of atlas cove that we have here in Lagos in both Calabar and Port Harcourt and then we have some level of sanity in our coaster water, definitely, the products can be moved around freely and then we can now concentrate on the maintenance and upgrade pipeline across the nation so that transportation of the products would be done with some level of ease.  But as it stands, if all these issues are not addressed, we believe that it will be very difficult for any body to deregulate if the checks are  efficient.
You said  government told you about their challenges.  What challenges are they facing?

They said they have identified the same challenges that just talked about.  They need to dredge, they needs to fix the pipeline network, and the rest of them. But the issue is,  how much of that have they done?  So,  how can they  now set such a very short time frame in the midst of these issues that they have identified on their own, which  has not been addressed. If we deregulate today, it is going to be purely import because the refineries have s not been fixed, the problem in the creek has not been addressed,  so Warri and Kaduna refineries cannot get crude to refines.


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