Power Woes: PENGASSAN Warns against Electricity Tariff Hike, Says Discos Frustrating Free Metering Scheme

● Proffers solutions to oil theft, pipeline vandalism

Amidst the persisting power outage across the country, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), an affiliate of Trade Union Congress of Nigeria (TUC) has cautioned against further increase in electricity tariff without a corresponding increase in power supply.

The oil workers also urged the federal government to work with stakeholders in the oil and gas industry and the national security architecture to find a lasting solution to menace of crude oil theft and pipeline vandalism which have adversely impacted the petroleum industry and Nigeria’s oil dependent economy as a whole.

In a statement issued on Wednesday after a world press briefing, the association also called for total elimination of estimated billings that have resulted in consumers paying more than their actual consumption.

It also warned staff of the Electricity Distribution Companies (Discos) deliberately frustrating the attempts by consumers to acquire pre-paid electric meters in order to engage in the old practices that encourage fraud to desist from such illicit act.

The oil workers noted that the issue of crude oil theft has made Nigeria lose out on accruing more revenue from the current high price of crude oil in the international market.

According to the association, Nigeria currently produces an average of 1.2 to 1.3million barrels of crude oil daily from a capacity of about 2million barrels of crude oil per day but expressed regret that much of the oil is lost to vandalism.

It noted that from October 2021 to February 2022, between 90 – 99% of crude oil pumped into the Trans National Pipeline (TNP) by operators was vandalized. “Reconciliation/Fiscalization at Bonny terminal shows that between 5 – 10% of crude oil metered from the operators gets to the terminals”, it said.

To stem the menace of vandalism, the Association advised that security agencies should be empowered to ensure regular surveillance of the pipelines to detect and prevent vandals’ action. It also urged authorities to ensure periodic movement of the security personnel to discourage them from compromising the security of the assets.

The Nigerian workers under the platform of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) having followed recent developments on all aspects of our national life with a special focus on our industry in the past few months invited you to this world press briefing.

The briefing is organized to call the attention of the government at all levels to pertinent issues affecting our members in particular and Nigerian citizens in general.

Petroleum Products Price and Availability

Over the years, we have been at the forefront of ensuring that petroleum products are available at affordable prices. In the last few months, we have watched with keen interest the endless queues that Nigerians face in the petrol station on a daily basis. This was initially attributed to the low quality of PMS imported into the country, later to the hoarding of products by marketers and lastly to the refusal of tanker drivers to transport products to different part of the country.

We wish to empathize with the masses of our dear country during this phase of our national life and urge the Ministry of Petroleum, Nigeria Mid, and Downstream Petroleum Regulation Authority (NMDPRA), NNPC Ltd., MOMAN, DAPMAN, IPMAN, and all other stakeholders in the supply and distribution value chain of the industry to double their effort in putting this incessant queues to an immediate end while ensuring that citizens pay the approved price of PMS in all parts of the country.

The Association is worried about the high price of Kerosene, cooking gas, aviation fuel and diesel. The fact that these products have since been deregulated does not give marketers the opportunity to exploit Nigerians. The regulator of the downstream sector of the industry must ensure that Nigerians are not exploited. Although the increase in the price of crude oil in the international market is partly responsible for the surge; from our findings, the non-availability of foreign exchange at CBN rate to marketers, is largely responsible for the increase as they source FX from the parallel market. This is without prejudice to the activities of unscrupulous marketers that are bent on milking Nigerians dry.

We, therefore, urge the Federal government to remove all forms of taxes and levies from the importation of petroleum products. The Nigeria Liquefied Natural Gas and other gas producers should be mandated to focus much more on domestic gas production. Efforts should be intensified to fast-track the current rate of rehabilitation of the nation’s four refineries to guarantee energy security why on the short term, make FX available to the importers at the official rate.

Should this abnormality and distortion continue, it has the ability to drive the country into another round of recession and further impoverish the already battered citizens.

The issues of crude oil theft have been exacerbated in recent times. This has made Nigeria lose out on accruing more revenue from the current high price of crude oil in the international market. We currently produce an average of 1.2 to 1.3million barrels of crude oil daily from a capacity of about 2 million barrels of crude oil per day.

From October 2021 to February 2022, between 90 – 99% of crude oil pumped into the Trans National Pipeline (TNP) by operators is vandalized. Reconciliation/Fiscalization at Bonny terminal shows that between 5 – 10% of crude oil metered from the operators gets to the terminals.

Another problem arising from vandalism is that companies are forced to go into curtailment when these assets/export pipelines are damaged as they cannot export what they produce. Thereby incurring production losses. An operator loses an average of 10 days of production shut-in every month due to vandalism.

Recent preliminary work showed that about 150 illegal tappings were used in siphoning crude oil from the TNP. This has forced all operators injecting crude into the TNP to suspend export/injection thereby shutting-in production. TOTAL Energies and SPDC for example stopped production into the TNP pipeline while Agip ENI declare force majeure on their brass terminal.

Beyond the reduction in revenue to the operating companies and the country, this act of sabotage has caused serious environmental degradation to the host communities and region. The health implication of this unholy act will be monumental in years to come.

As a matter of urgent national importance, the Association hereby asks the Federal government to work with stakeholders in the oil and gas industry as well as the national security architecture to find a lasting solution to this menace that is almost bringing the oil and gas industry to its knees.

It is our expectation that the pipelines integrity will be sound enough to enable safe transportation of crude and products all over the country, while Government establishes a special force committed to strict enforcement of Pipeline Right of Way. Pipeline installation can now be done using state-of-the-art technology in a manner that will be inaccessible to vandals. We expect that the managers of the pipelines imbibe the culture of regular maintenance while the government will live up to its responsibility of providing adequate security. Security agencies should be empowered to ensure regular surveillance of the pipelines to detect and prevent vandals’ action and there should be periodic movement of the personnel to discourage them from compromising the security of the assets. We also call on the Government to review the enabling legal instruments for sanctioning violators/defaulters.

ELECTRICITY/POWER;

We have watched times without number the rush to increase electricity tariffs even when there is a drop in power generation. We insist that there should be no increase in the tariff without a corresponding increase in power supply and total elimination from an era of estimated billings that have resulted in consumers paying more than their actual consumption. Also, Discos staff deliberately frustrate the attempt by consumers to acquire the pre-paid electric meter in order to engage in the old practices that encourage fraud. This act should be completely gotten rid off.

It is so sad that years after the unbundling of the Power Holding Company of Nigeria (PHCN), Nigerians are yet to feel the impact of the legions of companies created out of it. Instead, the citizens are subjected to serial grid collapse and total blackout.

We hereby call on the Federal government to immediately review the privatization of power generating companies and distribution companies that was carried out in 2014 as the operating companies have become more of a burden to the nation.

As a matter of urgency, the entire power sector must be unbundled and power generation, transmission, and distribution should be moved from the exclusive list to the concurrent list in Nigeria constitution.

Nigeria is continuously ranked low in all human development indexes; inflationary pressure has continued to go northward with no palpable plan in place to address the menace. The margin between the official exchange rate and the parallel market continues to widen as the manufacturers continuously patronize the foreign exchange speculators thereby increasing their cost of production.

Added to this sad development, the Nigerian economy remains confronted by many serious challenges, ranging from structural imbalance to improper coordination between macro and microeconomic policies and no convergence of fiscal and monetary policies.

We decry the alarming rate of unemployment in the country, especially among youths which have become embarrassing, and this calls for emergency action to be taken in earnest.

It is so glaring how the high level of joblessness amongst youth has contributed to the high rate of insecurity in all parts of the country.

Urgent steps must be taken to stern this ugly tide.

Decisive action some of which we have enumerated in this brief must be taken by the government in addressing the myriad of issues plaguing the economy and the suffering of Nigerians. The government cannot continuously play politics with important issues affecting Nigerians as the terrible state of the economy is driving the citizens to social vices and creating more national menace

As an Association, we will continue to hold government accountable in all fronts as national building is a collective responsibility.

The time to act is now as there is too much talk and less action.