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Show how subsidy removal can reduce unemployment, poverty, TUC tells FG


UNDER the umbrella of Trade Union Congress of Nigeria, TUC, Labour again said it is only opposed to import driven deregulation because an import driven deregulation will only worsen the poverty situation in Nigeria and labour remains opposed to any policy that will increase poverty and unemployment.

In a position paper on “Issues with Oil subsidy in Nigeria”, Chairman of Rivers State Council of TUC, Comrade Chika Onuegbu, insisted “what is required is the removal of corruption and inefficiency in the subsidy and downstream sector management, rather than the removal of the oil subsidy, as virtually all countries of the world operate one form of subsidy or the other for her citizens.

Our main concern with the government model or proposal is that much of the funds that will be freed from the removal of fuel subsidy will disappear through corruption and inefficiency. The fact remains that corruption in Nigeria is a very huge industry and has crowded out investments in the real sector. Our manufacturing industry is comatose due to corruption and the inability of the government to fix the power sector problems.

Comrade Onuegbu

The next concern that we have is that the government seems to be only interested in the removal of oil subsidy and not the total transformation of the downstream sector for the economic development of Nigeria. This if allowed to happen will be catastrophic. We expect the government to carry out a sincere, detailed and comprehensive review of the downstream sector with a view to finding and implementing lasting solutions to the industry’s problems.

How govt undermined local refineries: Comrade Onuegbu traced the history of fuel refining in the country to the Nigerian Petroleum Refining, NPRC, in 1965 with a capacity of 38,000 barrel per day at Alesa-Eleme, near Port Harcourt, lamented how government began undermining local refining capacity from late 1980s.

He said “we are unable to understand why since the late 1980s, government began to show that they prefer to run down the refineries so that they will justify selling them to their cronies at ridiculously low scrap value or continue to import petroleum products into Nigeria.

For  instance as at April 23 2010 when the leadership of TUC Rivers State Council visited the Port Harcourt refining Company ALESA Eleme, We were shocked to learn that no Turn around maintenance (TAM) had been carried on the Port Harcourt Refining Company  PHRC Refining plants for some 11 years as the last TAM on PHRC was done in 2000. We know   that without TAM the refining plants cannot be reliable and the safety of the workers would continue to be a major issue.

During the same April 23 2010 visit to PHRC, we were also shocked to learn that the turbines in the PHRC Power Plants that are supposed to be mandatorily overhauled every three years were last overhauled in 1993. The turbines have not been overhauled some 17 years now. No wonder there is this recurrent failure of the power generation plant leading to loading failures. There is also the issue of security of pipelines as we understand that PHRC pipelines are often vandalised by illegal bunkerers and operators of illegal refineries etc.”

“The truth remains that the refineries cannot function properly without adequate security for the pipelines. We again call on the Federal Government, the Minister of Petroleum Resources, the Management of NNPC and the Security agencies to beef-up securities of the Pipelines and workers.

The fact that these fundamental issues militating against the proper functioning of the refineries in Nigeria were not addressed by the Federal government even after Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN and its National Union of Petroleum and Natural Workers, NUPENG counterpart, two years ago listed  the proper functioning of refineries as part of the condition precedent to deregulation of the downstream sector is a clear demonstration that the federal government is not sincere about the welfare Nigerians and so should not be trusted to deliver any of its promises with respect to the removal of oil subsidy.”

“Some have argued that the government should privatise the refineries. However the revelations during the National Assembly probe of the past exercise of privatisations in Nigeria clearly shows that the intention was not true privatisation but the criminal sale at ridiculously low price of government assets with huge potentials.

We also understand that these assets were deliberately rundown to provide government with seemingly good reasons to sell them to their cronies as scraps.  Besides, it is in the interest of the country that we should own our refineries, but they should be allowed to run profitably without political interference. This is important for national security.

State owned refineries

These state owned refineries should run side by side and compete freely with private refineries. We join NUPENG and PENGASSAN to demand that Government must ensure that these refineries function properly before any consideration can be given to their proposal for the removal of fuel subsidy.”

“Another concern we have is that the government despite her huge investments in the power sector have not been able to make any appreciable progress. Even the constitutional hindrances to the growth of the power sector are not among the constitutional changes being proposed by the federal government.   We expect the government to first address the power sector problems before coming with the proposal for the removal of fuel subsidy.

Our reason is that it will assure us that government can be trusted and that they are serious about the welfare of the ordinary Nigerians. As we speak, in the absence of 24 hours power supply, a huge quantity of demand for refined petroleum products is for power. If we have 24 hour power supply, our demand for petroleum products will reduce and there will be marked improvement in the manufacturing and small scale businesses in Nigeria.”

5 years to end fuel import

TUC urged the government to “consider the concerns of the various stakeholders as well as come up with how to grow the local refining capacity such that within the next 5 years we would meet locally all our domestic demand for refined petroleum products in Nigeria, and such that within the next 7 years we will be exporting refined petroleum products to neighbouring African countries. We also would like the government to demonstrate very clearly how the proposed policy of fuel subsidy removal will reduce poverty and unemployment in Nigeria before we can begin to consider whether or not to support it.

As for the much talked about cabal in the oil industry, we think they are not bigger than the government and the country. If the government is determined, they can be brought to book and their activities adequately checked. We are also hopeful that the Senator Magnus Abe Joint Committee on Fuel subsidy investigation in the operation and management of the oil subsidy in Nigeria will expose the huge corruption and inefficiency that exist in the management of the oil subsidy in Nigeria.”



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