- PENGASSAN raises concerns about President Tinubu’s approval to split the 4% cost collection of NUPRC into two categories through a directive issued on 7th July 2023.
- PENGASSAN demands a reversal of the decision to split 4% of the cost collection from NUPRC, threatening resistance if not done by July 19.
- The Union warns that the earlier approved decision to use NUPRC funds for other purposes will have negative consequences for Commission staff.
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has written to President Bola Ahmed Tinubu through the office of the Chief of Staff, demanding a reversal of a decision to split 4% cost collection from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
PENGASSAN gave the president until Wednesday, July 19 to reverse the decision or face stiff resistance from the Union. The statement stated that an earlier decision approved by the president to split NUPRC funds for other uses due to massive accruals will spell doom for the Commission staff.
Backstory
In a statement written by PENGASSAN and seen by Nairametrics, the Union stated that President Tinubu gave approval and issued a directive signed by the Chief of Staff through a memo with reference SH/COS/24/B/178 dated 7th July 2023 to the Permanent Secretary of the Ministry of Finance, Budget, and National Planning.
The directive was to split the 4% cost of collection of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) into two categories:
- The first category consists of 2.5% for the NUPRC operations and routine capital expenditure
- The second category is allocated 1.5% for capital expenditure for upgrading crude oil and gas metering and transparency systems.
Crux of the matter
In its statement, PENGASSAN said NUPRC staff face a number of issues which will be exacerbated if the cost collection is split.
Some of these issues include a severe debt crisis of approximately N13 billion, jeopardizing its ability to meet financial obligations, including staff salaries and operational expenses.
The NUPRC has also failed to remit pension deductions from staff upfront allowances to their Pension Fund Administrators, causing financial hardships and affecting future retirement benefits.
Staff members also suffer due to the non-remittance of cooperative funds, adding to their financial burden.
The PENGASSAN statement also pointed out that zonal offices experience perpetual power outages, impacting operational efficiency and employee productivity.
Meanwhile, poor working conditions and lack of clean water further compromise their well-being.
According to PENGASSAN, NUPRC staff face challenges in receiving timely payments for claims, allowances, travel expenses, and medical reimbursements.
They have also not received entitled leave allowances, affecting their financial planning during leave periods.
They also claim that NUPRC encounters an alarming trend of inflated contracts, undermining transparency and effective financial management.
Meanwhile, the Commission has to deal with excessive legal fees, which strain the Commission’s financial resources, diverting funds from critical needs and staff welfare.
PENGASSAN also alleges that staff members are deprived of rightful promotional arrears, leading to dissatisfaction and discouragement and retirees face significant delays in receiving gratuities, causing financial hardship during retirement.
NUPRC neglects to provide essential working tools, hindering staff from performing their duties effectively. Meanwhile, staff face intimidation from DSS officials attached to the office of the Chief Executive, compromising their safety and well-being.
PENGASSAN also alleges that the Commission fails to provide on-call staff allowances, neglecting financial compensation for employees’ availability outside regular working hours.
Further breakdown of the PENGASSAN statement
According to the PENGASSAN statement, the Petroleum Industry Act (PIA) of 2021, clearly highlights factors to consider when determining allowances for the NUPRC, which include; the specialized nature of their work, the need for the Commission’s financial self-sufficiency, and the remuneration and allowances within the petroleum industry for individuals with equivalent responsibilities and expertise.
PENGASSAN presented the following arguments against a cut in NUPRC allowances as follows:
NUPRC staff are underpaid
The statement also stated that the remuneration of Commission employees should be benchmarked with the petroleum industry, not the Debt Management Office (DMO) as stated in the memo.
It also claimed that a quick survey of remuneration in the Nigerian petroleum industry for individuals with equivalent responsibilities and expertise reveals that employees of the NUPRC are underpaid.
Therefore, the assertion of ‘overly generous salaries and allowances’ to Commission personnel is false.
The unification of exchange rates does not increase accruals to N145 billion
According to PENGASSAN, the memo cited alludes that the unification of exchange rates will significantly increase the naira value of accruals to the Commission to N145 billion, considering that most of the revenue collected is denominated in US Dollars (USD).
However, PENGASSAN argues that the potential increase is only marginal, about 30%, as revenues are calculated and remitted based on the monthly average of the unified exchange rate, not a fixed value.
PIA mandates cost collection for the NUPRC
The memo cited suggests that the ‘massive accruals’ of the NUPRC are mainly utilized for operational costs and administrative overhead expenses.
But PENGASSAN wrote that PIA of 2021 lists the cost of collection as one of the sources of funds for the Commission, intended to meet its approved budgetary obligations, administrative and operating costs.
So, ceding a portion of the percentage of the cost of collection of the Commission would lead to mismanagement, neglect, and inadequate support for staff welfare.
OPTS are to blame for the lack of transparency systems
The PENGASSAN statement highlighted the resistance faced by the Commission from the Oil Producers Trade Section (OPTS) concerning the installation of metering equipment.
The Union argued that in exclusively ring-fencing funds for upgrading crude oil and gas metering and transparency systems, other critical areas that require investment, such as staff development, technology upgrades, and operational enhancements, may be overlooked.
The PENGASSAN statement stated that during the drafting of the Measurement Regulations, the OPTS disagreed with the metering requirement in a stakeholders’ forum.
They argued that the NUPRC should not enforce metering, asserting that installation responsibility should solely be with the licensees or lessees.
This unilateral act worsens production decline, leading to investment loss and reputational damage to the Nation and the Commission.
This insensitive recourse to ultimatum or face consequences is primitive. Everybody is threatening a government that is just two months. Can’t things be done quietly? If everyone decides on strike, we will lock up Nigeria and sit at home. The sit at home that we all know about how far has it taken the protagonists? Now they are begging government to stop what they supported and went into with their eyes open. If NUPRC is complaining of low pay, let them go and ask those core civil servants how much they earn. Enough of this unreasonable and immature threats. We all are in this and our best bet is to get out of it together