Fuel crisis looms across Nigeria as supply drops by 36 million litres

A petrol station used to illustrate the story
A petrol station used to illustrate the story

Nigerians could experience acute petroleum products scarcity in the coming days if the strike by oil workers continues.

The strike by the main oil industry workers union entered the second day on Wednesday; as daily average fuel supply, particularly Premium Motor Spirit, PMS, commonly called petrol, dropped by more than 36 million litres.

The industry’s senior staff union, Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, and its junior staff counterpart, National Union of Petroleum and Natural Gas Workers, NUPENG, had on Tuesday called its member on an indefinite strike in sympathy with their colleagues in the Nigerian National Petroleum
Corporation, NNPC, who are pressing for the resolution of issues regarding pensions’ management.

The pension issues were compounded by the revocation of the license of the NNPC pension scheme by the National Pensions Commission, PENCOM, over the corporation’s alleged inability to bridge the funding gap of about N85 billion in its pension scheme.

The NNPC, which has been running a closed pension scheme not subject to the regulation of the national pensions policy spelt out in the Pension Reform Act (PRA) 2014 as amended, was recently directed by PENCOM to discontinue its closed pension scheme arrangement and join the open scheme under the latter’s supervision; an arrangement the NNPC workers do not feel comfortable with.

Part of the unions’ demands underlining the industrial action has been for NNPC to be allowed to run its workers pension exclusively like other institutions as the Central Bank of Nigeria, CBN, in view of concerns of accountability and security of contributions under the open pension arrangement.

Another letter from PENCOM to the corporation on Monday, September 15, insisted on full compliance with the directive by using a 12-month window granted to wind down and “immediately take all necessary steps
to transit to the Contributory Pension Scheme under the PRA.”

But, the letter appears to have inflamed the strike.

Though the NNPC management said it was dialoguing with PENCOM on an amicable solution, it appealed to the leadership of the industrial unions to exercise restraint in their handling of the issue.

The NNPC noted that since the commencement of the scheme in 2006, the management and staff had made efforts to bridge the funding gaps in the scheme, currently at N85 billion as at June 2014, down from a deficit level of about N298 billion in 2010.

The impact of the two-day old strike has so far significantly threatened NNPC operations nationwide, as the corporation accounts for more than 45 per cent of the about 40 million litres daily consumption of petroleum products. The major and independent petroleum products marketers account for the importation of the remaining 55 per cent of the products consumed nationwide.

Long queues of trucks were seen along the routes to NNPC depots in Ejigbo, and Mosimi fuel depots waiting for hours for their turn to load petroleum products.

The Chairman, Mosimi Depot of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Dele Tajudeen, said if nothing was done to resolve the crisis and the strike called off, the situation might worsen in the days ahead.

“I urge the Federal Government and the unions to come to terms in finding lasting solution to the lingering crisis to save the economy,”

Mr. Tajudeen said. “Most trucks have been here since Saturday night to load products to various states, but it’s unfortunate that they found themselves in this mess.”

At Ejigbo Depot, the situation was not different, as the strike had virtually crippled NNPC operations in the area, with loading of petroleum products only holding at private depots only at exorbitant charges.

Loading of petrol, which usually attracts an official price of N89.70 per litre, went for between N90 and N91 per litre.

The President, Nigerian Association of Liquefied Petroleum Gas, NALPGAM, Basil Ogbuanu, said the strike had also significantly affected loading of gas in some of the depots across the country.

According to him, the shut-down of Warri depot, which has the highest concentration of his members, would create scarcity of the product nationwide.

A statement from PENGASSAN on Wednesday did not offer any hope for an immediate resolution of the crisis, as its Media Officer, Babatunde Oke, said the strike would continue until the union extracted firm commitment from the NNPC on the issues at stake.

Mr. Oke said the unions were also demanding regular funding of the closed pension system, immediate steps to carry out turn around maintenance (TAM) on the four refineries as agreed between government and the two unions as well as restoration of crude supply to the refineries.

He said the issues had gone beyond granting of a 12-month grace to the NNPC by PENCOM, adding that the NNPC management should put in place a machinery that would automatically fund the pension system without any bureaucratic bottleneck.

The union blamed the crisis on the inability of the NNPC board to meet for over a year to approve the proposal of the management for funding of the pension system.

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