Key highlights
- NUPENG wants local refineries to be active before the fuel subsidy is removed.
- The Union supports subsidy removal but wants a better socioeconomic outcome for Nigerians in the process.
- The Federal Government has scheduled June 2023 as the official date for removing the fuel subsidies.
The Nigeria Union of Petroleum and Natural Gas Workers have issued a warning to the Federal Government, calling on them to ensure all local refineries are working before the fuel subsidy is removed.
According to news reports, NUPENG issued a communique making the demand after its National Executive Council meeting held in Lagos state. NUPENG said that it is not opposing the removal of fuel subsidies, however, the refineries need to work before the removal is done. A part of the communique read:
“NEC-in-Council examined the recurrent discussions for the removal of subsidy from the Petroleum Motor Spirit (PMS) and expresses deep concerns over the failure of the Federal Government to do the needful as advised by Organized Labour that deregulation of the PMS should not be predicated on importation of the product because of all the obvious negative impacts on the socio-economic life of the people and nation in general.
“The Council-in-session expressed disappointment in the failure of the government to deliver on its promises of making the three national refineries work before contemplating the removal of the subsidy on this very important economic item in view of the enormous implication and the impact on the economic activities and considering the socio-economic importance of PMS to ordinary Nigerians.
“The NEC-in-session reaffirms that in as much as our Union is not averse to the removal of PMS subsidy, the Federal Government must ensure that our local refineries are put into full operation before a such major policy decision is taken in the interest of the generality of Nigerians.”
What we know about the refineries’ rehabilitation timelines
Prior to this time, the Buhari administration had assured that the Port Harcourt, Kaduna and Warri refineries will be rehabilitated and will work to process the country’s crude so as to reduce importation and shipping costs on refined petroleum products.
In January 2023, the Group Chief Executive Officer of Nigerian National Petroleum Company, Mele Kyari said that the Port Harcourt refinery would be ready for work by the first quarter of 2023. That deadline is now past as the second quarter of the year has begun in earnest. At the time, Kyari said:
“The promise was to start the fuel plant, which is the 60,000 barrels per day (bpd) component of this activity by the last quarter of 2022, but it is not practical. So, we will start it off in the first quarter of 2023, otherwise, every other process is ongoing.”
The Warri refinery has been scheduled to begin operations by December 2023. Also, the Kaduna refinery has been scheduled to start operations in 2023 as well, with no definite deadline.
The optics
The government has stayed quiet regarding a new timeline for the Port Harcourt refinery rehabilitation. However, going by the demand of NUPENG, the government cannot remove fuel subsidies until the end of 2023 when the Kaduna and Warri refinery is scheduled to have completed their rehabilitation process.