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Source: www.africaecon.org

Africa Economic Institute

Oil Workers and Senate Committee Respond to Deregulation and Privatization Policies


  Union members of the National Union of Petroleum and Natural Gas (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) gave the Federal government a 21-day notice. The notice stipulated that if the government did not reverse its decision on deregulation and the planned privatization…

Union members of the National Union of Petroleum and Natural Gas (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) gave the Federal government a 21-day notice. The notice stipulated that if the government did not reverse its decision on deregulation and the planned privatization of refineries, then they should expect oil workers to go on strike. The threat of a strike by union members came after postponed meetings between government and labor union leaders.

The Senate Committee on Petroleum (or Downstream) has blamed the full deregulation of the petroleum sector on the federal government. The Senate believes that the complete deregulation should have slowly been implemented instead of the abruptness that transpired. PENGASSAN and NUPENG have also condemned the constant cases of kidnappings in the Niger Delta. The unions are becoming increasingly irate with the lack of action from the federal government to protect its member and the implementation of the policy. In a joint statement, the unions have stated that starting today (3rd March), all oil and gas workers will start a three-day warning strike.

The National Executive Committee (NEC), the union of both PENGASSAN and NUPENG, has also demanded the urgent implementation of the Petroleum Industry Bill. They have also demanded that Oil and Gas Implementation Committee be established.The workers are asking for more security in the Niger Delta, through aerial surveillance to stop violence in the region.

Talks between labor leaders and officials of the Federal Ministry of Petroleum Resources did not occur due to the government’s desire to include stakeholders. The next scheduled meeting will be mediated by the Presidential Steering Committee on the Global Economic Crisis. Officials are hoping that the postponement of the parlance will help simmer down the anger of labor officials. Talks are expected to resume next Wednesday to discuss the new policy action of the federal government in respect to the deregulation of the downstream petroleum sector.

The Senate Committee on Petroleum (Downstream) said that the privatization of the nation’s refineries should be done in an open, competitive and transparent process. Chairman of the Committee, Senator Emmanuel Paulker, said that the matters should be addressed in a sensitive manner since the policy action affects many people’s lives. Paulker also went on record to state that the aim of the policy was to improve the welfare of Nigerian citizens. He believes that the best action would be to follow traditional global paths in regards to the petroleum downstream sector. The policy came from a recommendation from the Presidential Steering Committee on the Global Financial Crisis. The removal of the burden of refining, sourcing and distributing petroleum products would also remove the fiscal burden, estimated to be N640 billion per annum. Although Paulker does believe that deregulation is needed, he does not support the actions of the government in implementing the policy. He believes that the anger from the NEC could have been avoided if they were consulted when the Committee was creating and implementing the policy.

Paulker also spoke in regards to the privatization component of the policy and is not surprised about the Committee’s recommendation to privatize refineries. He explained that although refineries are national assets, they do very little to produce anything and have become more of a fiscal burden to the economy. Privatization opens the door for more competent companies to produce at optimal levels. Paulker warns, based on the mistakes of the previous administration, that in order for this to be a success, the government needs to make the process of privatization open, competitive and transparent. If the process of privatization is implemented correctly, not only will the national economy profit, but it will also lessen Nigeria’s dependency on imports.

Source: www.AfricaEcon.org
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Source: www.africaecon.org