By yielding to one of the demands of petrol tanker drivers, the Federal Government recently momentarily sidestepped an ugly development that had become quite synonymous with Nigeria’s downstream petroleum sector – fuel scarcity and its attendant queues. Chineme Okafor writes
When The Petroleum Tankers Drivers (PTD) section of the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) announced that it was going on a nationwide strike on account of stored up complaints, most Nigerians from experience expected it would be another round of long lingering and tortuous queues at petrol service stations across the country.
As witnessed over time, such occasions of frequent strikes by any of the stakeholders in Nigeria’s downstream petroleum sector have always had massive impact on the socio-economic life of the country, from increases in costs of goods and services, to extra incomes for black market petrol operators who swiftly take over the streets and corners of the country hawking petrol in plastic kegs to exasperated consumers without the tolerance for long queues.
In most cases, consumers even sleep at service stations to get supplies into their vehicles or kegs, thus making the thoughts of strike and petrol scarcity agonising to Nigerians.
The call for strike
But then, the PTD rose from their Central Executive Council (CEC) meeting in Lagos recently, and announced to the nation the decision of their members to go on a nationwide strike on grounds of unresolved industry-related issues.
They listed their grievances to include poor road networks, poor welfare for their members by their employers the National Road Transporter Owners (NARTO), as well as insecurity of their members amongst other issues.
But key on their complaint list was the welfare of their members whom they claimed were short-changed by NARTO, and inadequately compensated for the work they do.
In their communique announcing the planned strike, NUPENG on which platform the PTD operates said: “The CWC-in-Session considers inhumane, the refusal of the National Association of Transport Owners (NARTO) to commence negotiation with the union for the renewal of the expired Collective Bargaining Agreement (CBA) on the working conditions of our tanker driver members in the PTD branch, after several appeals and even an ultimatum.”
The CBA as learnt also involved the bridging claims paid by the government for trucking of petrol by the tanker drivers, and it was on the basis of this that the union mobilised for the strike.
Having perhaps attained the status of ‘demigods’ on the back of Nigeria’s very decrepit downstream petroleum distribution infrastructure, the tanker drivers like most of the unions in the country’s petroleum industry, have often leveraged their position to extract from Nigeria demands for improved services for their members.
The bridging scheme, which was originally introduced as a temporary measure during the unfulfilled turn-around maintenance (TAM) of Nigeria’s petroleum products refineries, and wherein government sought to encourage and support marketers in transporting petroleum products nationwide, has however become a part and parcel of the pricing templates developed by the government.
Although bridging was meant to be a temporary solution until the refineries resumed production at full capacity, the state of the refineries has worsened over the years, while pipeline vandalism has also made products distribution by trucks established against the more economical option of pipelines.
Accordingly, the initial projection was to have a maximum of 10 per cent of total petroleum products bridged while the remaining portion will be pumped through the pipelines, however, trend analysis indicated that bridging of products have consistently increased over the years, thus granting the tanker drivers a lot of influence as to make the country quiver to threats of strike by them.
The meeting
While the strike action barely took off as planned, a meeting called by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, to iron out the identified issues, immediately resulted in the union calling off their strike.
The meeting was reportedly attended by the President of the National Association of Road Transport Owners (NARTO), Kasim Bataiya, National Chairman of PTD, Saliman Oladiti, Chairman House Committee on Petroleum Downstream, Hon. Joseph Akinlaja, and President of NUPENG, Comrade Igwe Achese, as well as representatives of the Petroleum Equalisation Fund (PEF).
At the meeting, the NNPC GMD disclosed that the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had approved the increase of the bridging cost allowance from N6.20k to N7.20k, thus providing the unions the sweetener with which they could negotiate further on their other challenges.
Baru noted that such gesture by the government should spur the unions to call off their planned strike and engage in productive discussions. His expectations were however fulfilled when Achese announced that the strike had been called off by the union from the government’s intervention.
A statement announcing the call-off was subsequently provided to THISDAY in Abuja by the Group General Manager, Public Affairs of the NNPC, Mr. Ndu Ughamadu.
The Aftermath
Even though the strike was called off mostly from the government increase of the bridging claims for marketers by N1, reports that the pump price of petrol at service stations would subsequently increase, became rife, thus necessitating a denial of such development by the NNPC and the Petroleum Products Pricing Regulatory Agency (PPPRA).
The NNPC said in its response to such, that the recent increase in petrol bridging allowance to transporters from N6.20 to N7.20 per litre will not lead to an increase in the pump price of petrol from the prevailing price of N145 per litre.
Ughamadu, stated that the Chief Operating Officer in charge of NNPC’s downstream operations, Mr. Henry Ikem Obih, gave the assurance that there was no plan by government or any of its agencies to review the pump price of petrol above N145 per litre.
According to Ikem-Obih, the rise in the bridging cost was achieved after an adjustment was made in the “lightering expenses” from N4 to N3 per litre and the difference transferred to compensate for the cost of bridging within the same template.
By definition, the bridging allowance refers to the cost element built into the products pricing template to ensure a uniform price of petrol across the country, while lightering expenses involve charges for moving products to depot area from mother vessels by light vessels due to the inability of the former to berth in shallow water depth.
Ikem-Obih however said: “What happened, in simple language, is a rebalancing of the margins allowed and approved for stakeholders. So what the Petroleum Products Pricing Regulatory Agency (PPPRA) did was to take N1 from lightering expenses and add same to the bridging allowance. That is how we arrived at N7.20. Therefore, PMS remains at the ceiling of N145 per litre.”
He also stated on the availability of product supply that as at today, the country had 1.3 billion litres of petrol which translated to an inventory of 36 days.
“What this means is that even if we stop importation or refining of petrol right now, we have enough products in-country to provide for the needs of every Nigerian for a period of 36 days,” he said.
Speaking further, Ikem-Obih noted that the supply availability was bolstered with the production of petrol from the three refineries located in Port Harcourt, Warri and Kaduna.
According to him: “There is absolutely no risk of shortage in supply as we also continue to import to support the production from the refineries, we have informed the Department of Petroleum Resources (DPR) to enforce the prevailing N145 per litre price regime and also ensure that every service station that has fuel is selling to the public.”
He also reiterated the readiness of NNPC to sustain the existing cordial relationship between it and the leadership of the downstream industry unions and other stakeholders, adding that the Department of Petroleum Resources (DPR) which is the regulatory arm of the industry had been alerted to sanction fuel station owners who engage in hoarding or charge consumers in excess of the approved pump price of petrol.
