Divestment does not affect our members, says Osifo

President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, in an interview, spoke on the state of refineries and divestments as they impact workers as well as the union’s stance on the tax reform bills currently pending before the National Assembly. GLORIA NWAFOR was there.

What is the state of the refineries and the effects of the exchange rate on the pricing of petroleum products?
We state unequivocally that the old Port Harcourt Refinery is functional, and the Warri Refinery is also functional as of today. These refineries are working, although not to the full installed capacity yet. I would also confirm that there is enormous work going on today in the Kaduna Refinery as well as the new Port Harcourt Refinery. In terms of the pricing, we stated repeatedly that the real challenge that we are facing as a country is mainly about our exchange rate. The price of PMS is high today because the exchange rate is high. The exchange rate has affected the price of literally everything. We have said that if the exchange rate is less than N1,000 to a dollar, we will be buying PMS for as low as N500 to N600 per litre. In the same way, we will be buying AGO slightly above the price of PMS, and the same for kerosene. So, the reason everything is high today is because of the weakness of the naira.

As trade unions, both on the Trade Union Congress of Nigeria (TUC) and PENGASSAN end, we have been advocating the need for our forex to be properly managed. In terms of value addition of the refineries, we have said that a lot of jobs will be created. When the Port Harcourt Refinery was working, we had close to 2,000 people working there. But today, when you go there, the number of staff and support staff that are there has reduced drastically, and some have been transferred to other SBUs within the NNPCL. The same thing in Warri Refinery and also the Kaduna Refinery.

Regarding the divestment issue, have the affected workers received their benefits? If not, what measures is PENGASSAN taking to ensure that they receive their entitlements?
During our last NEC meeting in December, we came up with strategies to ensure that none of our members lose their jobs as a result of divestment. I want to announce that by the grace of God, today, none of our members has lost his/her job as a result of divestment. Just as a guarantee, we have transited from a Nigerian oil company to Oando Energy Resources Limited with zero loss to membership. We just transitioned from Mobile Producing Nigeria Unlimited to Seplat Energy Producing Nigeria Unlimited with zero-loss jobs. The condition of service was 100 per cent protected. I want to announce to you that there are none of our members today that is earning less than what they were earning before now as a result of divestment. So, it is an achievement that we are extremely proud of. For the divestment of SPDC, the conversation is ongoing, and we also assure that no member against his position will lose his or her job, and the remuneration will equally be enhanced further.

What is the union’s stance on the proposed tax reform bills?
Our position is very clear. I am going to tie this to the Value Added Tax (VAT) and the expansion of tax. We welcome the reform in our tax administration system. But there are some key provisions in the bills that might be inimical to the growth of Nigeria and the economy. One, we looked at the issue of increasing the VAT. Increasing the VAT is going to impoverish Nigerians much more. When I talk about us getting an expanded revenue base by harnessing our material and mineral resources, not increasing VAT, because today, if the VAT is increased, it is passed back to Nigerians. We are the ones who will pay for it. So, what we are advocating is that instead of increasing VAT, the government should bring more people into the net. People who are paying taxes today in Nigeria are less than 10 to 15 per cent of those who should pay. What that means is that if you expand that to about 80 per cent, you are going to generate much more revenue.

But, increasing the rate is going to impoverish Nigerians much more. Another thing that we also looked at in the proposed bills is the proposal to the Federal Inland Revenue Services (FIRS) with the Nigerian Revenue Service that will be saddled with collecting revenue across boated. On how it affects us, for example, is NUPRC, they are the ones that are responsible for calculating royalty. They are the ones that are responsible for looking at the profit margin and all that, and this, in the end, is paid not to the NUPRC account; it is paid to the government’s account. But NUPRC has been saddled with this responsibility. So, our challenge today is that if you move that function to the Nigerian Revenue Service, where would they get the requisite experience to collect that specialised tax effectively? Are they going to have the requisite expertise to be able to administer this? Will they now be going from one field location to another to be able to look at what the companies are declaring vis-a-vis production? How will service now reconcile with other functions that are domiciled in the NUPRC?

So, we could see that Nigeria as a country might be shortchanged when we go in that direction. So, all these are the things that we have highlighted in the proposed bills. Again, if an establishment like TETFund is yanked off, that will affect the quantity of money that is available to the tertiary institutions and that can affect the quality of education. These are all the issues that we have highlighted. These are the issues that we are going to canvass, and we are currently canvassing. We are not even waiting for the public hearing. We have started engagement. In the next few days, we are going to meet with those in authority as well on this subject. We are putting up some presentations together to engage them further before we get to the public hearing stage.

What is your take on the persistent national grid collapse?
We are estimated at 210 million Nigerians, and we believe strongly that we have competent and knowledgeable Nigerians. You could see what happened in Geometrics in Aba. It was a private initiative supported by the state government and we see the revolution that happened. We are quite happy that today, the government has decentralised power generation. It is very good as we have been calling for that for ages. If you look at the speeches of my predecessors, we have been calling for the decentralisation of the power grid system. Today, that is a work in progress. However, we think that we can do better than what we have today as a country. Have you ever seen a situation where you have an engineer as the Minister of Health? Have you ever seen a situation where we have a medical doctor as Attorney-General of the Federation? Power generation is a technical job. We could see when somebody like Prof. Berth Nnaji was the Minister of Power, we saw the difference that came within that period. So, what we are saying is that you must put round pegs in round holes and square pegs in square holes. It is a general principle. So, the reason for the grid collapse is not our responsibility. It is the government that should fulfil its responsibility. Whether it is because of an upsurge in generation, because of a lower generation, as a result of a trip to one of the stations, or as a result of tests. It is the responsibility of the government to find solutions. That is why they are in government.

What capacity of oil production do you believe the country should strive for to meet its economic expectations?
We have said that Nigeria is a country that has about 37 billion barrels of global oil reserves. Today, the country is doing less than two million barrels per day. If we continue in this way, when you divide 37 billion by two million, we are going to see that over the next 50 years, we will still be producing. But, we will only have that 50 years. So, what we are advocating is that as a country, we must expand our production base. We have the capacity as a country to be doing nothing less than four million barrels of crude production per day, and that is the direction that the government must embark upon. That is the direction that we must continuously find ways to achieve because it will not just give us more revenue, it is also going to create a lot of jobs and increase our GDP as a country.