By Victor Ahiuma-Young & Precious Enaike The planned price cap on petroleum products by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, could worsen the country’s fuel crisis and drive investors away from the downstream oil sector, former President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Festus Osifo, has […] The post NMDPRA price cap may worsen fuel crisis, scare investors — Osifo appeared first on Vanguard News .
By Victor Ahiuma-Young & Precious Enaike
The planned price cap on petroleum products by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, could worsen the country’s fuel crisis and drive investors away from the downstream oil sector, former President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Festus Osifo, has warned.
Osifo, who is also President of the Trade Union Congress of Nigeria, TUC, said the proposed policy could undermine the benefits of a liberalised petroleum market by discouraging investment and weakening competition.
He spoke in Lagos at a reception organised by the TotalEnergies E&P branch of PENGASSAN to mark the end of his six-year tenure as president of the union.
The TUC president urged the NMDPRA to reconsider the price-capping approach and instead implement policies that would attract more investors into the downstream sector.
“What we should focus on is to have competition. When we have competition, competition naturally brings down price,” he said.
Osifo said Nigeria needed more investors, particularly those willing to establish modular and large-scale refineries, arguing that increased competition would provide a more sustainable path to lower petroleum prices.
He noted that the Petroleum Industry Act, PIA, provided for a liberalised petroleum industry, urging the regulator to deepen competition rather than introduce policies that could discourage investors.
He warned: “If we focus on that price capping, we are going to drive away investors.”
According to him, increased participation in the downstream market would compel businesses to compete for market share and ultimately bring petroleum prices closer to levels affordable to Nigerians.
Nigeria needs higher crude production
Osifo also called for a significant increase in Nigeria’s crude oil production, saying output should rise from the current level of about 1.8 million barrels per day to between three and four million barrels per day within the next three to 10 years.
He said the increase was necessary given Nigeria’s estimated crude reserves of between 30 billion and 38 billion barrels.
According to him, higher production would strengthen the oil industry and generate greater economic benefits for the country.
Reflecting on his six-year tenure, Osifo said his administration successfully defended workers’ jobs despite the challenges posed by the COVID-19 pandemic, currency devaluation and restructuring arising from increased investment in the industry.
He said PENGASSAN branches that had gone more than 10 or 15 years without collective bargaining agreements, CBAs, secured fresh agreements, while branches whose agreements had remained unchanged for between six and eight years negotiated improved welfare packages.
Osifo disclosed that salaries in some international oil companies, IOCs, increased by 300, 500 and even 700 per cent within the past year.
He said PENGASSAN interventions also helped prevent job losses arising from acquisitions and restructuring involving indigenous and international oil companies.
The former PENGASSAN president stressed that improved wages and job security in the oil and gas industry benefited millions of dependants and communities across the country.
He identified the PENGASSAN Foundation as another major legacy of his administration, citing interventions in education, healthcare, electricity and community development in underserved communities.
On his next move, Osifo said his immediate focus would remain on the TUC, where he has about two and a half years left in office.
He said his priority was to build on the achievements of the labour centre and take it to greater heights, adding that his leadership positions had always been driven by a commitment to service.
He also expressed readiness to embrace future opportunities to serve humanity.
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