PENGASSAN: Buhari must increase local production before deregulation

Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has called on President Muhammadu Buhari to ensure that the focus of deregulation policy is based on local production rather than importation.
The senior staff union argued that if local refining is not increased to meet local demand for petroleum products, especially the Premium Motor Spirit (petrol), removing subsidy on petroleum products will bring more hardship on Nigeria.
In a statement by PENGASSAN National Public Relations Officer, Comrade Emmanuel Ojugbana, the association said that removing subsidy while the country depends on importation of refined products will make prices of refined petroleum products to be out of the reach of the masses and cause inflation.
Restating the position of the trade union, Ojugbana said that importation of refined petroleum products is a major drain on the nation’s revenue, adding that it creates jobs for the refining nations in spite of the high unemployment rate confronting Nigeria.
“Importation of refined petroleum products is also putting the Naira under undue pressure and creating social problems for the economy. This is unacceptable to PENGASSAN.
“Abrupt removal of fuel subsidy will create chaos that may ground the economy. PENGASSAN calls for well-coordinated measures with timeline to achieve self-sufficiency in local refining as a means of proffering acceptable steps to end fuel subsidy.
“This should be combined with such other measures for effective optimisation of gas, especially for domestic, industrial, electricity and automotive energy. Such will create other affordable and friendly sources for energy needs.”
He, therefore, called on the government to declare a state of emergency in the downstream oil and gas sector and convene an all-stakeholders forum to come up with concrete and sustainable steps with reliable timeline for achieving demand-supply equilibrium through local refining. The strategy must be to guarantee a total stoppage of both petroleum products importation and fuel subsidy.
He noted that Nigerians expect that relying on the resources that the nation is endowed with; the country should be able to provide refined products at reasonable and affordable prices to the populace, adding that this could have been possible if local refining capacities are enhanced.
Ojugbana explained that both the government and industry operators had always yearned to promote competition and efficiency but failed to assure on how to enhance local refining capacity to contain local demand.
“Government is thus persistently confronted with import parity pricing and the burden of subsidizing the imported fuel instead of locally refined products. As an important stakeholder in the sector, we oppose the petroleum products importation regime, which is rent seeking and indeed a drain devise that is inimical to our economic and social empowerment. It is affecting our self-dependence and means of job creation. Thus, we maintain our unwavering belief in local refining.”
He stated that PENGASSAN strongly subscribe to the retention of the state-owned refineries in the best interest of the nation and for economic security, adding that this is in keeping with OPEC’s principle that member countries should hold good grip of the commanding height of their economy.
“PENGASSAN maintains strong objection to the privatisation of state-owned refineries as the OPEC principle is being cautiously guided by other OPEC member countries.”