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TUC gives tips on successful deregulation

By Victor Ahiuma-Young
UMBRELLA body for senior staff Associations in the country, the Trade Union Union Congress of Nigeria (TUC), has given some essential tips perceived to be paramount for a successful deregulation of the nation’s downstream sector of the petroleum industry.

President-General of TUC, Comrade Peter Esele, in a statement the body implored  government to carry out a thorough audit of fuel imports and the related subsidy with a view to prosecuting those that have abused the policy..

Comrade Esele who is the immediate past President of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said: “Government should establish a mechanism to ensure that our importers obtain refinery gate prices and not spot or middlemen prices.  Jetty draft that constrains vessel size should be eliminated by dredging so that the unit cost of landed product can be reduced to efficient  minimum by the use of large import vessel.

The pipeline and depot integrity must be fully restored to reduce if not eliminate  the excessive movements of products across the country by road tankers that damage our roads and create rent taking in product distribution across the country.

The  pipeline and depots have to be unbundled and open access granted to all importer of products
The local Refineries in the Country must be made to work optimally. this will reduce our waste and also make the Country to benefit from the value added of refined crude. Most importantly, energy security is important to a nation.

Consequently, government  must discourage the use of an armada of ships on the high seas at extravagant demurrage fees as the nation’s strategic reserve. MT Tuma or a similar facility must be assured as a strategic reserve before deregulation is considered at all. At any rate the cost or demurrage that is attributable to such storage facility should be a federation budget line item and not a cost to be borne by the consumer.”

“In the long run it is important to focus on local refining.  Importation must be seen as a short_term while more refineries must be built. It takes an average of 36 months to build a refinery. In the years that we have spent millions of dollars to import petroleum products, we could have used the money and time to build at least ten refineries. As a labour leader my primary responsibility is to ensure that employment

is created and more Nigerians are gainfully employed. The establishment of more refineries will create jobs. We export jobs when we import products as we have been doing in the last couple of years.

It should be noted too that with importation, Nigerians will not get the benefit of a reduced crude price. This is so because crude export is our main foreign exchange earner. A reduced crude price will leave the fiscal authorities with no other choice than to devalue the Naira as happened earlier this year with a consequent increase in the landed price of imported petroleum products. It must be clear to all that with importation of petroleum products, head or tail, Nigerians lose and lose woefully.

There is currently too much political interference in the activities of the NNPC this has impacted negatively in the way decision is made.  No nation can make progress if best practices and sound corporate governance is relegated to the background in difference to a favoured few.”

According to the statement:   “This is the long term challenge if the Petroleum industry reforms currently being canvassed are to succeed along side a deregulated downstream sector. Government has recently advertised the benefits of deregulation comparing it to GSM. It is a wrong comparison since with GSM, one can decide whether or not to own a phone or what brand to own(high end vs low end). It is a choice that one can freely make.

However, there is no Nigerian citizen, rich or poor that is not impacted by the price of petroleum products one way or the other. So, if deregulation must succeed, and our tears wiped away  by government, government must do first things first. The key first things are to carry out an audit of the historical imports and the related subsidy, name and shame the cartel of fraudsters masquerading as importers, and create an enabling environment for deregulation.”

“If life must be better for the generality of Nigerians, we must be a nation that learn lessons from past difficulties and mistakes and continuously ensure that our processes are improved upon. Unfortunately this is not the case as we never learn, nor do we improve our systems and processes.

The consequence is that whilst other nations are progressing, we are compounding our problems and retrogressing. We must learn lessons from our recent ugly past and take on board  lessons we learn. Only the good processes that will guarantee the consumer the best possible pump price should be adopted in any environment. Government should work very hard to achieve this, unfortunately we are from achieving this. The consequences of a failed deregulation are better imagined than experienced.”


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