- Reps in rowdy session over Kachikwu
Minister of State for Petroleum Resources, Ibe Kachikwu, has said over 350,000 jobs in the oil sector have been affected by the economic crisis.
Speaking at the special session of the House of Representatives in Abuja, on Monday, Kachikwu said the country was presently producing at 1.4 million barrels per day, as against its former production level of 2.2 million barrels.
Kachikwu added that Nigeria’s upstream rigs production had also fallen to zero.
“I do share the sentiments of many Nigerians that the country that produces 2.2 million barrels should not be in the business of importing petroleum products.
“We need to begin to look at our upstream, we have unwittingly killed the upstream. Today, there’s no single rig operating in Nigeria. All the rigs are gone.
“When the rigs are gone, it means that no meaningful exploration can take place. I labour as approvals are brought to me to sign upstream contributions,” he said.
Kachikwu said investments in the upstream sector could create as much as 300,000 jobs for Nigerians in the downstream sector.
“If we continued what we were doing, we had the risk of losing close to 400,000 jobs in the downstream sector.
“Today, I’m sure you are aware that we have lost literally over 350,000 jobs in the downstream sector. Dealing with these issues will enable us go back to economic sanity where jobs don’t get lost.
Kachikwu also said Nigeria’s crude oil production had declined from 2.2 million barrels per day to 1.4 million barrels per day due to pipeline vandalism.
This, he said, translated to loss of 800,000 barrels of oil by the country daily.
He condemned the incessant attacks on oil installations in the country, saying “we declined from 2.2 million barrels which was the focus of the 2016 budget to 1.4 million barrels as of today”.
He, however, expressed the ministry’s commitment to ensuring that destroyed facilities were repaired and effectively protected.
“We are going to work hard to see how we will get these issues resolved and get our production back,” the minister said.
Kachikwu restated the need to develop infrastructure, which he described as “key” to promoting increased and efficient crude oil production.
In the meantime, Minister of State for Petroleum Resources and Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Ibe Kachukwu, was yesterday, quizzed by the House of Representatives over the recent increase in the price of fuel from N86.50 to N145.
The House, which initially had a rowdy session over the decision to admit Kachukwu into the Chamber, also urged the Nigeria Labour Congress, NLC, to shelve its planned strike,Kachikwueven as it set up an ad-hoc committee to interface with labour and other stakeholders to resolve the crisis. The emergency session of the House was basically to deliberate and take position on the price hike. But it unexpectedly took another twist as the session became rowdy for over 30 minutes. When the special session was about to start, Majority Leader, Femi Gbajabiamila, had moved to admit the minister into the Chamber, but his motion did not enjoy popular voice vote.
However, it was ruled in his favour by Speaker, Yakubu Dogara, a development that irked the opposition Peoples Democratic Party, PDP, lawmakers, who insisted that Kachukwu should not be ushered into the Chamber. While the protest lasted, the opposition lawmakers, who wielded the national flag, waved them repeatedly, chanting, “all we are saying, save Nigeria now” and echoing “APC shame”, while their APC counterparts watched and responded with “APC Change.” In the midst of this, the Speaker conferred with Principal Officers, who had approached him, and emerged to cede the floor to Minority Leader, Leo Ogor, who immediately requested the House to dissolve into executive session, which was granted.
The House thereafter went into executive session and admitted Kachukwu, who took time to convince the lawmakers over the decision to remove subsidy and increase fuel price. The minister told them that the Federal Government had no other option than to deregulate by removing subsidy because of diminished forex supply situation which had forced marketers to stop product importation and imposed over 90 percent supply burden on NNPC since October 2015.
He cited other reasons to include significant decline in government foreign exchange revenues due to over 60 per cent drop in global oil prices compare to 2014 and the renewed sabotage and pipeline vandalism in the Niger Delta. According to him, violence in the Niger Delta has drastically reduced crude oil production to 1.4 million barrels per day as against 2.2 million. He further stated that the commitment of crude oil volumes outside the 445,000bpd to meet national supply requirements has caused diminishing remittances to the federation account, which in effect had made many states to continue having financial challenges in payment of salaries and meeting up with other financial obligations, amongst others. Comparatively, Kachukwu said average price of crude oil was valued at $110 in January 2012 but dropped to $40 in May 2016, adding too that in 2012, there was availability of fund to cater for the subsidy regime due to booming oil prices, unlike this year, when there is low crude prices and lack of funds.
Further, the minister also explained that importation of crude in 2012 was based on 50 per cent financing from NNPC and 50 per cent from oil marketers, unlike now, when financing for importation is almost hundred per cent handled by NNPC, a model he said was unsustainable. Reacting to questions about the urgency in the need for fuel hike, he said it was done to libralise the environment for private marketers and other entities, willing to supply Petroleum Motor Spirit, PMS, to source for their forex and import, to ensure availability of products in all locations across the country. The minister, after making his submission, fielded questions from the lawmakers, who were all supportive of the policy. Ogor said former President Goodluck Jonathan saw tomorrow by attempting to remove subsidy in 2012. In a motion, Ossai Nicholas Ossai, asked the House to set up a committee to interface with labour and other stakeholders in view of the impending strike. Majority Whip, Addo Doguwa, also prayed the House in a related motion, to prevail on labour to shelve the planned strike, pending the outcome of the committee’s actions.
The prayers were granted and the committee chaired by Doguwa was set up and is to report back to the House in five days. Meanwhile, Federal Government said some of the gains of the new price regime include ensuring product availability across the country, reduction in hoarding, smuggling, diversion as well as price stabilisation. Government also said the activities of Niger Delta Avengers cost the nation over 500,000 barrels of crude every day with more than 1,000 kilowatts of electricity lost in the process.
This was disclosed in Abuja yesterday by Minister of Information and Culture, Alhaji Lai Mohammed. He said: “The policy will create labour market stability, as this will potentially create additional 200,000 jobs through new investments in refineries and retails and prevents potential loss of 400,000 jobs in existing investments. “We are therefore seeking the understanding of all Nigerians and appealed to organised labour to sheathe their sword. “This is not the time for any action that will further worsen the economy.
The situation is dire, not just in Nigeria but elsewhere around the world.
“For instance, the United Arab Emirates, the third-biggest oil producer in OPEC, has become the first country in the oil-rich Persian Gulf to remove fuel subsidies. “In addition, the country has announced that with effect from 1 August 2016, fuel prices will be deregulated.
“Also, in response to fiscal pressure caused by the fall in crude oil prices, OPEC’s top oil producer Saudi Arabia has announced a plan to raise fuel prices. You can now see that this is indeed a global problem.” The minister said the government has no choice than to liberalise the price of petrol to end the crippling scarcity that has enveloped the country and ensure availability of the products. He re-emphasised that government has not removed fuel subsidy. “There is no subsidy to remove because no provision was made for subsidy in the 2016 budget.
“Last year, government paid out N1trn in subsidy, and that’s one sixth of this year’s budget. We can’t afford to pay another N1trn in subsidy,” he added.
Mohammed said the entire 2016 budget is packed with palliatives and that about N500,000bn has been set aside for social intervention that will touch the lives of millions of Nigerians and lift more out of poverty.
Tribune with additional report from National Mirror
