Saturday, October 22, 2011

We only subsidise interest of the cartel – Kokori; Sulaiman

The prices of petroleum products in Nigeria have been a source of contention and controversy. This is because for an economy that is almost singularly hinged on crude oil export and therefore, highly sensitive to internal market shocks. A fractional rise in the cost of fuel will have unmitigated ripple effects on the industrial sector and key components of the basic needs such as food, housing and health.
Since the last few weeks when government dropped the hint, technocrats, businessmen, politicians, trade union leaders, individuals have lashed out on government over the planned removal.
Saturday Vanguard gathered that there is a strong resolve by Nigerians to resist governement attempt to finally remove the subsidy. Most of them hinged their argument on the poor state of infrastructure in an already downtrodden economy where people are exposed, not only to poverty but other forms of social exclusion and where several promises have been made and none fulfilled.
We only subsidise interest of the cartel – Kokori; Sulaiman
Government’s position therefore, seems a hard sell. But with its insistence on going ahead to withdraw subsidy on petroleum products, it ma
y well be another anarchy to happen.
Chief Kokori
Former Secretary General of Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), Chief Frank Kokori, said the proposed withdrawal of petroleum subsidy may usher in another terrible period for Nigerians. “It may be a tragedy to happen at this stage of the pauperised situation of Nigerian populace.
This will translate into hike in transport fares, the supply of foods and other services connected with human existence. The people can only tighten their belt more than they have done. Obviously the people will either be crushed, or after being pushed to the wall, bounce back to face the government and from there anything could happen.”
Kokori stated that the reasons adduced by government for this action are a ruse. “For those of us who are familiar with the situation, we are convinced that government’s reasons are just a facade. They have said it from 1999 and we followed them. Obasanjo said more than three times that he needed money to build infrastructure, but the country is getting poorer and poorer. Unemployment is on the rise. I know at a point in 1994 when I went to prison, we left it at N2.70k and I know for 10 years, it rose slightly and Nigeria was better off.
“Nobody should tell us that when they increase it, it will mean abundant life for the people. No! Until the leakages are blocked and the rampant corruption in the country checked, until people who are corrupt are punished to serve as deterrent to others, then the government will be playing a game of chess with the entire 140 million Nigerians.”
The former chairman of Lagos Chapter of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Abubakar Sulaiman opined that those who are in the industry know that it is a fraud, adding that the most important issue now is that there must be palliative meassures put in place.
“We at PENGASSON have told government that before they deregulate, there must be palliatives. They should make the existing refineries work so that we can start local production first to full capacity. With that, we can be sure of about 50 per cent of our consuption and if there is need for importation, then it will be minimal, the private sector can handle that and there will be true competition.”
He noted that over the years, what has been happening was a delibrate attempt to render the refineries ineffective. “They delibrately grounded the refineries and at the same time some crooks in NNPC and the Marketers are the ones reaping this money. So, corruption is number one issue that must be handled. Secondly, bearing in mind that none of the refineries is working, if you now deregulate, there will be what we call price parity. The landing cost for PMS for example will be about N140, so it will pose a huge problem not only on the people but even on the economy. This is because many industries that use generators will have the challenge of cost. If we are going to deregulate something must be given back to the people,” he said.
Government seems to be more obsessed with its deregulation policy than the transparency of its process. If not, what has it done to crush the cartel that has been subjecting the Nigerian people to untold hardship or what has it done to uncover and deal with the huge theft going on in the industry?
Government said it spent N1.3trillion on subsidy. It had bugeted N240billion. As it is now, nobody is sure of the actual amount of what subsidy on petroleum takes. Chief Kokori said the country only subsidised the interest of the cartel. “Nothing is being subsidised.
I think only the cartel is being subsidised. When you don’t produce your own fuel which we are capable of doing, it becomes a problem. In 1980/81, the Warri and Kaduna refineries were opened, and the newest was 2nd Port-Harcourt refinery which came about two or three years later.”
“So, for a period of 28 years, no one refinery was good, and for a period of about five years, three new refineries were built and for 28 years, no new refinery came on board. Is that a good situation for a good country? One of the biggest producers of oil in the world! You now sacrificed the people for failing to refine our own product here.
Honestly, how much do you pay the workers? Labour is so cheap in Nigeria and our crude is one of the best in the world. Look at what they are bringing into the country, these are the most inferior products around. I know the type of Kerosene we produced in Warri refinery and not this rubblish that goes up in flames and dries up in few minutes.
These are the kind of infereior products these cartel brings into the country. This is the problem we have. So, a country that could not fix its refineries and discipline the thieves turn…Mondy is holding the cartel. It is a disgrace and a big shame that they allow these people to rid the country dry.”
“The government only says there is a cartel without doing anything. I dont think any serious government will do that. They keep giving the people this rubbish year in year out. The people are just helpless. You are now saying you want to subsidise because you say you use N1.3trillion. Why not build two refineries with that? You could build two good refienries with that. So, to me it does not make sense. There is no subsidy,” he opined.
“If we have our own refineries and we are producing, the hightest we would have been paying is about N35 per liter and we will export and gain foreign exchange. The insistence of government to take these products out for refining and sell them to you at a price six times more than what it should have been, and you buy it with your currency as a few cartel rakes in billions of dollars, the people are suffereing and you are now coming again saying you are removing subsidy, it is senseless.”
On the ability of labour unions to save the situation, he said: “If the Nigeria Labour Congress and other trade unions allow them, then it is a shame. Let me also say the union themselves are not what they used to be in my own time but I know we still have that solidarity, just like the media has its own problem.
It used to be very strong in those days and I know they make sacrificice and put their lives on the line. These days, it is if you can’t beat them, then join them. I still believe in the union because they have the mechanism of checking the trend.”
Comrade Sulaiman also holds the same view, saying, “Nobody knows the actual amount. The whole thing is a fraud. But what I can tell you is that according to NNPC officials, they say they say they are consuming close to 52million liters of PMS per day. To me, it is a fraud.” “We don’t even know what we consume per day.
That is the area they have to investigate. Nobody knows the actual amount we are using in servicing the subsidy and you will be surprised that if we deregulate we might not be consuming up to half of what they claim we are consuming because what they are packaging together is just inflated figures.”
He however suggested that if there is proper deregulation, industries will thrive and will work to full capacity. “You will see the full potentials of our industries, we will eventually be exporters of crude oil bye products. But the building of the refineries should come first because this is what we have been telling them for more than five years now. What they do is to call for turn around maintenance and at the end of the day it will not work.
But now, look at Iran, it deregulated recently. It focused on its working class and injected the gains of subsidy into the finances of the people. That will be alright if they can work out that. In Ghana, despite the fact that they have not got crude oil, the refineries function effectively and that has great impact on the economy of the nation.
“The issue of deregulation has been on for more than 10 years now, we have been saying they should not deregulate but we realise people capitalise on that stand and have been exorting the nation. Labour is discussing, but for us in PENGASSON, it is going to be a very serious issue.
The downstream sector of oil and gas is dying, but we also realise that there is no way government will deregulate without its consequences on the people. So, we are looking for a win-win situation. Part of these is that if there must be deregulation, there must be palliatives. We are ready to work with gvernment to see how it will be resolved. We are not saying total ‘no’ to deregulation but it must come with human face,” the former union leader said.

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