The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has said uncertainty in the oil market may lead to job losses in the sector.
NUPENG General Secretary, Afolabi Olawale, who issued the warning, also said that the working relationship among oil marketers, depot owners and importers is being strained by the volatility in the oil sector.
Olawale made these known in a telephone interview with Nairametrics while responding to questions on the impact of the Middle East tension caused by the United States-Israeli war against Iran.
What NUPENG is saying
Olawale said the crisis might have a long-term effect on workers in the oil sector and Nigeria at large because there might be a reduction in work due to the instability.
- “We know that the long-term effect will also affect the workers because there might be reduction in work.
- “For now, it has not directly affected our members because their location is here in Nigeria. But overall, you do not know the limit and extent of these things at the end of the day.
- “It’s not only our members, but also the marketers and their employers. There is high unpredictability of prices and there has been a crisis between the marketers and the depot owners as well as the importers.
- “For instance, you pay for a product last week, and this week the price has gone up. All this volatility is affecting working relationships, and it will have an effect on employment and harmonious working relationships, while also distorting prices. And it’s going to affect Nigerians in the long run as well,” he said.
Olawale said the cost of shipping is also going to go up because of insurance given the war in the Middle East.
- “In a war-prone world, the insurance premium will be high, and the shipping cost will also be high. And that is what is affecting crude oil prices globally as well.
- “It is a problem because you cannot predict the route you’re going to take; anything can happen in a situation of war. The war has spread beyond just Iran’s territory; it has caught up with other places,” he told Nairametrics.
NUPENG warns against reliance on fuel importation
The NUPENG General Secretary said one of the solutions to the crisis for Nigeria is to produce locally and not depend solely on the importation of fuel.
- He added, “We thank God we have Dangote that is producing, that is why our energy security should not be dependent purely on importation
- “Because India is now in a quagmire because they used to buy from Russia and Iran, but with the problem now, Iran cannot export again, and the US has banned Russian crude oil from being bought by India. The same applies to China. So it’s having negative effects globally. It’s beyond where the war is taking place.
- “That’s why we have been clamouring for our refineries. Successive governments have abandoned our refineries, which is not good. And in a situation like this, what do we fall back on?”
Calls for local refining
The call for the activation of local refineries has been emphasised by stakeholders as the Middle East tensions intensify.
- The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) warned on Monday that the pump price of Premium Motor Spirit (PMS) may hit N2,000 per litre amid the ongoing crisis.
- PETROAN urged the Nigerian National Petroleum Company Limited (NNPCL) to urgently strengthen domestic refining capacity as a strategic step to shield Nigeria from global petroleum market shocks.
The National President of PETROAN, Billy Gillis-Harry, specifically called on the Group Chief Executive Officer of NNPC Ltd., Bayo Ojulari, to facilitate the immediate commencement of production at Nigeria’s local refineries, particularly the Area 5 plant at the Port Harcourt Refinery and the Warri Refinery.
What you should know
Global oil price shocks have affected the prices of petrol, diesel, and other petroleum products since the Middle East crisis began.
- In Nigeria, petrol prices have seen three consecutive hikes and now sell above N1,000 per litre.
- Dangote Petroleum Refinery on Tuesday reduced its ex-depot price for Premium Motor Spirit (PMS) by N100, with the refinery now selling at N1,075.
- The reduction from N1,175 marked the first downward adjustment after several increases recorded in recent days.
The hike in PMS prices continues to have ripple effects across the economy. Transport fares have gone up, and the prices of certain goods and services have increased as well.
