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Subsidy of N45.21 on each litre of petrol not sustainable – PENGASSAN

…Says refineries are in a stage of comatose, need to be revived

The President, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Ndukaku Ohaeri, has revealed that N45.21 subsidy paid by the Federal Government on every litre of petrol consumed in the country is not sustainable.

According to the data released recently by the Petroleum Products Pricing and Regulatory Agency, (PPRA), the subsidy to be paid by the federal government on every litre of petrol being consumed in the country has increased to N45.21 In an exclusive phone interview with Daily Times, the PENGASSAN boss stressed that there is no way the country can sustain that kind of money for a resource God has given free of charge.

He reiterated that all the government need to do is put its house in order and be deliberate on what next line of action to take.

“We have enough petroleum products to refine that will be sufficient for the country and the neighbouring countries. This kind of arrangement on subsidy, it is something that is not sustainable” he fumed.

The Nigeria refineries under the tutelage of the Nigerian National Petroleum Corporation made a cumulative loss of N123.25billion from January to October 2019.

Reacting to the loss by refineries, he said, it should not come to anybody as a surprise that the country has made a lot of losses in that space, he added that “obviously I don’t think anyone should expect a miracle knowing full well that the refineries are not working and since they are not working, definitely there would be a loss”

He added that he doesn’t think there is anything strange about the refineries making such losses and unless a drastic step is taking to bring it back to live, the present comatose of the refineries will not yield any positive result.

Reacting to the cry from various sectors that the downstream should be deregulated, he said their machinery to be put in place before taking such the step can be taken because part of the reason Nigerians clamour for subsidy is that they see it as a means of softening the hardship they are passing through.

Ohaeri said the first step the government should take is to adopt the Nigerian Liquefied Natural Gas (NLNG) ownership and operating model for the refineries, as it one of the best ways to maximize those national assets.

He added that the government should look beyond politics and reconsiders the passage of the Petroleum Industry Governance Bill (PIGB) as this bill will remove some of the barriers of efficiency, address loopholes of corruption and position the industry for greater competitiveness and productivity.

He suggested the inclusion of a clause that mandates International Oil Companies (IOCs) to refine certainly percentage of their crude production in the country, as this will definitely mark a new era in the Oil and Gas industry to the benefit of the country and her people.

“Government is not best in handling businesses, therefore, my the expectation is that they should shop for those who have the expertise in managing refineries business and am not talking about people who come into the country with portfolios and briefcases.

“I am talking about people who are professional in the business, bring them in through the ownership structure, copy from NLNG and also the government should change the operative model.”

“When all these are done, the refineries will come upstream, importation of fuel will stop, the subsidy will gradually disappear, the issue of pricing will be bygone as everyone can now sell at there own price, then the government can then fully deregulate the downstream sector and Nigerians will not see it as a means to kill them”, he averred.

Oil analysts have, however, argued that marketers posed a huge roadblock to the refineries performing optimally due to subsidy and margins they receive from the government.