Fuel Scarcity, No Thanks To Labour | Independent Newspapers Limited
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Fuel Scarcity, No Thanks To Labour

Steve agwudagwu
Posted: Jun 8, 2016 at 2:00 am   /   by   /   comments (0)

BY Steve Agwudagwu

There are some critical factors, which to my mind, labour unions should have brought up in their ongoing negotiations with government. Of course, if you raise these factors with unionists, they will argue that these issues are none of their concern because they relate to governance and not labour.

However, whether they like it or not, the factors are so fundamental that unless they are addressed abinitio, the implementation of the outcome of their negotiations with government may be marred and everybody will soon be back to the vicious cycle of fuel scarcity, price hike, strike, price cut and back to scarcity all over again. These factors are three: one revolves around the Nigerian National Petroleum Corporation (NNPC) as a corporation, the other has to do with the four refineries and the third is environmental.

I will start my analysis with NNPC but in doing so my intention is not to embarrass the person of the Honourable Minister of State for Petroleum Resources, Dr Ibe Kachikwu, whom by all objective assessment, is doing a commendable job. NNPC is the most strategic public company today because it manages the sector that earns almost all the revenues of the country. Being a behemoth taking care of our collective patrimony, it has to be accountable and incorruptible. The point I am alluding to is that it has to maintain proper record of its statement of affairs, a system of annual reporting and accounting, audited annually by reputable external auditors for its own creditability. However, what is on ground now is that NNPC as a corporation does not have a properly audited statement of accounts for almost five years running. As a matter of fact, its last signed consolidated group financial report was for 2010/20011. This is not good enough.

Truth be told, the only audit worth its name of NNPC since that time, is the PriceWaterhouse Coopers (PwC) forensic Audit of February 2015 ordered by President Mohammadu Buhari to investigate the allegation of unremitted funds into the federation account by the corporation. However, the terms of reference of PwC were quite specific and focused as indicated in the report: “The procedure we performed did not constitute an examination or review in accordance with generally accepted auditing standards or attestation. Therefore this should not be confused with a proper audit. If private companies on the stock exchange are compelled by law to provide statement of affairs every year and follow it up with “facts behind the figures” appearances at the Nigerian Stock exchange (NSE) before stock brokers and investors to explain their operations for the year, why shouldn’t there be a legislation compelling NNPC, not only to cause its operations to be audited by reputable external auditors, but make it public by presenting the reports to the House Committees on finance and media at least once a year? I thought labour should have picked on this issue and pushed for a complete restructuring of NNPC as a precondition for backing down. The reality is that NNPC manages the energy sector for the people of Nigeria. The people should know how much it earns and how much it spends. They should know the quantity of crude it exports and cross check to see that the dollars earned corresponds to the quantity.

The nation’s four refineries which feature prominently in government’s plan for permanently eradicating fuel scarcity and transforming the country into a net exporter of finished products in two years time is the next factor that I thought should have been of concern to labour. Our refineries as they stand now are a combination of ancient and modern and an amalgam of technologies from many countries of the world whose parts are already out of production long ago. But Dr Ibe Kachikwu using his professional knowledge of the industry has managed to retool and get them back to work within an incredibly short time, though not at full capacity at the moment. It is not labour’s job to repair refineries. That I know. But the reason for depending on imported petrol and price hikes which labour responded to in this crisis is because the refineries are not producing enough. There is a huge shortfall between local production and national demand hence the need to import to fill the gap. Labour should have touched this issue in its negotiations with government because although the minister is very optimistic that Nigeria will soon export finished products, the feasibility of such projection is quite doubtful.

Availability of locally refined products is one of the keys to achieving the objectives of both labour and government; the welfare of the people of Nigeria. In the likely event that the refineries are unable to deliver due to pipeline vandalism, would government not go back to encouraging importation of fuel through subsidy payments? And if there is no foreign exchange to pay subsidy and private importers cannot or refuse to import, will scarcity not return followed perhaps by another price hike? I think labour should be partners in progress in helping the federal government find an amicable solution to the threat that the new wave of insurgency in the Niger Delta portends. Labour should get government to agree to a deadline to crushing the new wave of insurgency in the Niger Delta just like it did for Boko Haram in the North East.

Lastly, I have it on good authority that even some of the limited quantities of fuel being locally refined right now still find their way through our porous borders to neigbouring countries because the deregulation is partial and the new pricing is not enough to discourage smuggling of products. I think labour should go for complete deregulation rather than this half-hearted approach of government. They should bring this matter to the negotiating table and demand a phased implementation timeline for total deregulation.