Energy
‘Abrupt removal of subsidy will fuel chaos’- oil workers tells Buhari
By Kunle Kalejaye
LAGOS-Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN has warmed the new government that abrupt removal of fuel subsidy would lead to economic chaos noting that deregulation policy should be based on increase local production refined petroleum products rather than importation.
The senior staff union argued that if local refining is not increased to meet local demand for petroleum products especially for Premium Motor Spirit, PMS (petrol), removing subsidy on the products will bring more hardship on Nigerians.
In a statement signed by PENGASSAN National Public Relations Officer, Comrade Emmanuel Ojugbana, the association said removing subsidy while the country depends on importation of refined petroleum products will make their prices out of reach for Nigerians thereby causing inflation.
Restating the position of the trade union, Comrade Ojugbana said that importation of refined petroleum products is a major drain on the nation’s revenue, adding that it creates jobs for the refining nations in spite of the high unemployment rate confronting Nigeria.
“Importation of refined petroleum products is also putting the Naira under undue pressure and creating social problems for the economy. This is unacceptable to PENGASSAN.
“Abrupt removal of fuel subsidy will create chaos that may ground the economy. PENGASSAN calls for well-coordinated measures with timeline to achieve self-sufficiency in local refining as a means of proffering acceptable steps to end fuel subsidy.
“This should be combined with such other measures for effective optimization of gas especially for domestic, industrial, electricity and automotive energy. Such will create other affordable and friendly sources for energy needs.”
He therefore called on the government to declare a state of emergency in the downstream oil and gas sector and convene an all-stakeholders forum to come up with concrete and sustainable steps with reliable timeline for achieving demand-supply equilibrium through local refining. The strategy must be to guarantee a total stoppage of both petroleum products importation and fuel subsidy.
He noted that Nigerians expect that relying on the resources that the nation is endowed with; the country should be able to provide refined products at reasonable and affordable prices to the populace, adding that this could have been possible if local refining capacities are enhanced.
Comrade Ojugbana explained that both the government and industry operators had always yearned to promote competition and efficiency but failed to assure on how to enhance local refining capacity to contain local demand.
“Government is thus persistently confronted with import parity pricing and the burden of subsidizing the imported fuel instead of locally refined products. As an important stakeholder in the sector, we oppose the petroleum products importation regime, which is rent seeking and indeed a drain devise that is inimical to our economic and social empowerment.
“It is affecting our self-dependence and means of job creation. Thus, we maintain our unwavering belief in local refining.”
He stated that PENGASSAN strongly subscribe to the retention of the state-owned refineries in the best interest of the Nigerian nation and for economic security, adding that this is in keeping with OPEC’s principle that member countries should hold good grip of the commanding height of their economy.
“PENGASSAN maintains strong objection to the privatization of State-owned Refineries as the OPEC principle is being cautiously guided by other OPEC member countries.”
Amid a slight increase in gas production, Nigeria’s oil output experienced a substantial rise in November 2024.
Gas production saw a 2.9% month-on-month (MoM) increase, reaching 2,292,951 million standard cubic feet (MSCF) from 2,292,471 MSCF in October.
However, on a year-on-year (YoY) basis, the growth was minimal, with a mere 0.02% increase in output for the first 11 months of 2024, compared to the same period in 2023.
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The latest gas report from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) also revealed a 1.6% increase in domestic gas consumption.
A total of 606,658 MSCF was consumed locally, compared to 596,861 MSCF during the same period in 2023. Gas exports, meanwhile, rose by 6.9%, reaching 829,156 MSCF, up from 775,547 MSCF in the corresponding period of 2023.
This growth in exports continues to play a vital role in bolstering Nigeria’s foreign exchange earnings.
Despite these positive figures, sources close to the Ministry of Petroleum Resources (Gas) noted that oil remains the dominant force in Nigeria’s energy sector, with gas taking a secondary role.
On the other hand, the NUPRC’s oil production report revealed a remarkable surge.
Nigeria’s oil output, including condensates, rose by 13.3% year-on-year in November 2024, reaching 1.7 million barrels per day (bpd), up from 1.5 million bpd in November 2023. Month-on-month, oil production also increased by 10%, from 1.5 million bpd in October 2024.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprises (CPPE), discussed the broader structural dynamics within Nigeria’s economy, highlighting the dominance of the non-oil sector.
In his 2025 Outlook, Dr. Yusuf noted that the non-oil sector contributed 94.43% to Nigeria’s GDP in Q3 2024, while the oil sector accounted for just 5.57%.
“However, the economy is characterized by a paradox of the oil sector contributing an estimated 90% of foreign exchange earnings, while the non-oil sector accounts for about 10%,” Dr. Yusuf said.
“This is a structural shortcoming in our economy which needs to be addressed, as sectors that contribute hugely to GDP have no corresponding contribution to foreign exchange earnings.”
He further emphasized the need to address the challenges faced by the non-oil sector, which include issues related to productivity, infrastructure, funding, and regulatory constraints.
“The policy implication is that more should be done to fix the challenges of productivity and competitiveness of the non-oil sector of the economy,” Dr. Yusuf added
The Nigerian National Petroleum Company Limited (NNPC Ltd) has announced that the 125,000-barrel-per-day Warri Refining & Petrochemicals Company (WRPC) in Warri, Delta State, has become operational.
This is coming about a month after the commencement of operations at the 60,000-barrel-per-day-old Port Harcourt Refinery.
The Group Chief Executive Officer, NNPC Ltd, Mele Kyari, made the disclosure during a tour of the facility on Monday.
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A video posted by Channels TV on Monday showed Kyari addressing a tour team, which included the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed.
Before the tour commenced, Kyari explained that the inspection aimed to show Nigerians the level of work completed so far.
According to him, although the repairs on the facility are not yet 100 per cent complete, operations have commenced.
He said, “We are taking you through our plant. This plant is running. Although it is not 100 per cent complete, we are still in the process. Many people think these things are not real. They think real things are not possible in this country. We want you to see that this is real.”
Located in Ekpan, Uwvie, and Ubeji, Warri, the petrochemical plant produces 13,000 metric tonnes per annum (MTA) of polypropylene and 18,000 MTA of carbon black.
Commissioned in 1978 and managed by NNPC Ltd, the WRPC was built to supply markets in the southern and southwestern regions of Nigeria.
The mechanical completion of the facility was initially scheduled for the first quarter of 2024, according to the Spokesperson of the NNPC Ltd, Olufemi Soneye.
“Warri should be done by Q1 (first quarter) 2024,” Soneye stated.
The WRPC is one of Nigeria’s four refineries. Others include the old and new Port Harcourt Refining Company in Rivers State and the Kaduna Refining and Petrochemical Company in Kaduna State.
MRS Oil Nigeria Plc, a prominent player in the Nigerian downstream oil industry, has implemented a new petrol price of N935 per litre across all its retail service stations nationwide.
The company has also called on Nigerians to monitor and report any outlets that fail to adhere to the new price structure.
Biztellers reports that this is consequent upon an announcement by the President of Dangote Industries Limited, Aliko Dangote, that the Dangote Petroleum Refinery has partnered with MRS Oil and Gas to offer petrol at N935 per litre at retail outlets, following a reduction in the ex-depot price from N970 to N899.50 per litre.
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It was gathered that MRS Oil Nigeria Plc has instructed all its outlets to implement the new price immediately, setting up a digital platform and monitoring team to ensure full compliance.
In a statement on Monday night, the company declared, “Petrol is now being sold at N935 at MRS Filling Stations nationwide. If you find any station not following this price, please report it. Call 08009447853 or email: NG-FMKPMGWHISTLEBLOWING@NG.KPMG.COM”
Emphasising the eco-friendly nature of its products, MRS Oil added, “We call on all petrol station owners to join MRS Oil Nigeria Plc in improving the supply chain of our beloved country, ensuring product quality and availability in every corner of Nigeria for the benefit of all Nigerians.”
In Lagos, commuters were seen queuing at MRS filling stations to purchase petrol, with many expressing their gratitude to the Dangote Petroleum Refinery and MRS Oil and Gas, urging other marketers to support the indigenous refinery rather than import off-spec products into the country.
A commuter at the MRS station at Alapere on the Lagos Ibadan Express way, Ibukun Phillips, could not hide her joy as her husband filled up their car.
“I am very happy today. This is a victory for Nigeria,” she said. “The price reduction is the best gift of the season. But beyond just the reduction, we are buying standard, eco-friendly petrol at a lower rate. My husband and I have decided we will only be using MRS from now on because we are confident in the quality of the product and supporting the economy.”
A commercial bus driver, Adio Ajibade described the price reduction as a great relief, especially during the festive season.
“The reduction is a great relief. It will reduce transportation costs and benefit Nigerians. God will continue to bless Alhaji Aliko Dangote,” he said.
A public affairs analyst and university lecturer, Dr. Tunde Akanni, said the collaboration between Dangote Petroleum Refinery and MRS Oil represents a significant step towards improving the affordability, quality, and sustainability of petroleum products in Nigeria.
According to Dr. Akanni, “this move will not only help ease the financial burden on Nigerians but also promote a more environmentally conscious approach to fuel consumption, benefitting both the economy and public health in the long term.”
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