15 November 2011

Nigeria: TUC Charges FG to Tackle Corruption in Downstream Sector

As controversy continues to trail the Federal Government planned removal of fuel subsidy, Trade Union Congress of Nigeria (TUC) has challenged government to concentrate more efforts in fighting corruption and inefficiency in the downstream sector of the oil industry rather than remove subsidy on fuel.

The Congress argued that virtually all countries of the world operate one form of subsidy or the other for the benefits of her citizens.

It also urged government to come out with a blueprint on how the proposed policy would translate into reduction of poverty and unemployment in the country.

Chairman of Rivers State Council of TUC, Mr. Chika Onuegbu, who made this position in a paper titled 'Issues with Oil Subsidy in Nigeria', reiterated that labour was not averse to deregulation of oil sector, but pointed out that it was only opposed to import driven deregulation.

This, he stated, was because an import driven deregulation would only worsen the poverty and unemployment situation in the country.

Onuegbu insisted that "what is required is the removal of corruption and inefficiency in the subsidy and downstream sector management, rather than the removal of the oil subsidy, as virtually all countries of the world operate one form of subsidy or the other for her citizens".

According to him, TUC's main concern with the government model or proposal was that much of the funds that would be freed from the removal of fuel subsidy would disappear through corruption and inefficiency.

"The fact remains that corruption in Nigeria is a very huge industry and has crowded out investments in the real sector. Our manufacturing industry is comatose due to corruption and the inability of the government to fix the power sector problems.

"The next concern that we have is that the government seems to be only interested in the removal of oil subsidy and not the total transformation of the downstream sector for the economic development of Nigeria.

"This if allowed to happen will be catastrophic. We expect the government to carry out a sincere, detailed and comprehensive review of the downstream sector with a view to finding and implementing lasting solutions to the industry's problems," he explained.

Speaking further, Onuegbu urged government to fix the existing refineries in order to increase the local refining capacity, which, he said, had been undermined by the government in recent years.

He traced the history of fuel refining in the country in 1965 with a refining capacity of 38,000 barrels per day at Alesa-Eleme, near Port Harcourt, but expressed regret that government began undermining local refining capacity from late 1980s.

He urged the government to "consider the concerns of the various stakeholders as well as come up with how to grow the local refining capacity such that within the next 5 years we would meet locally all our domestic demand for refined petroleum products in Nigeria, and such that within the next seven years we will be exporting refined petroleum products to neighbouring African countries.

"We also would like the government to demonstrate very clearly how the proposed policy of fuel subsidy removal will reduce poverty and unemployment in Nigeria before we can begin to consider whether or not to support it.

"As for the much talked about cabal in the oil industry, we think they are not bigger than the government and the country. If the government is determined, they can be brought to book and their activities adequately checked.

"We are also hopeful that the Senator Magnus Abe Joint Committee on Fuel subsidy investigation in the operation and management of the oil subsidy in Nigeria will expose the huge corruption and inefficiency that exist in the management of the oil subsidy in Nigeria," he said.

He further urged government to address the power sector problems before coming with the proposal for the removal of fuel subsidy noting that this would boost the confidence of Nigerians.

"Another concern we have is that the government despite her huge investments in the power sector have not been able to make any appreciable progress. Even the constitutional hindrances to the growth of the power sector are not among the constitutional changes being proposed by the federal government.

"We expect the government to first address the power sector problems before coming with the proposal for the removal of fuel subsidy. Our reason is that it will assure us that government can be trusted and that they are serious about the welfare of the ordinary Nigerians.

"As we speak, in the absence of 24 hours power supply, a huge quantity of demand for refined petroleum products is for power. If we have 24 hour power supply, our demand for petroleum products will reduce and there will be marked improvement in the manufacturing and small scale businesses in Nigeria," he added.

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