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Africa

Unions denounce Buhari's petroleum sector 'unbundle'

Nigeria's President Buhari is facing stiff opposition over his decision to split the national petroleum industry into six units. Union members condemned the president for failing to consult them.

Petroleum unions are furious over President Muhammadu Buhari's decision to dismantle the Nigerian National Petroleum Corporation (NNPC), the very institution he created when he was petroleum minister in 1976.

The Petroleum and Natural Gas Senior Staff Association (PENGASSAN) and its junior counterpart NUPENG had announced a shutdown of all operations at state oil firms in protest at the "unilateral decision," PENGASSAN's Babatunde Oke said.

The shutdown was called off on Thursday after the petroleum minister, Emmanuel Ibe Kachikwu, who doubles as head of NNPC, intervened. "I don't want the industry shut down," Kachikwu said.

Fuel shortage across the country

The shutdown, which lasted one day, sent shockwaves across Nigeria and left long queues at petrol stations. "I have been standing in queue since yesterday for eight hours," Emeka Godwin Mwake, a resident in the capital Abuja, said.

When he took office in September 2015, Buhari promised to reform the oil sector and rid it of corruption and mismanagement. But the approval he gave for the splitting up of NNPC into upstream, downstream, gas power marketing, refinery groups, and ventures divisions, met with serious criticism.

"You need to carry the people along," another Abuja resident said. "You don't just wake up and disband what you set up, they will resist it."

Gas station in Lagos (Photo credit should read EMMANUEL AREWA/AFP/Getty Images)

The unions’ decision to shut down operations created a fuel scarcity in the entire country

The Chairman of PENGASSAN, Mallam Saleh Abudullahi, said petroleum minister Kachikwu had failed to consult them before making the decision. Kachikwu agreed saying that "the engagement has not been good enough" but maintained that the NNPC had not been broken up. "What we have simply done is reorganization," he added.

Rampant corruption in the oil sector

The NNPC is accused of inefficiency and of running up billions of dollars in debt. Buhari's plans to carry out at complete overhaul aimed a boosting transparency had been anticipated, but many see his decision to dissect the entity into six units as going too far.

"It is like creating an artistic work. You mold it, cast it to dry and then you wake up one day and just crush it," an Abuja resident said. "It doesn't work like that."

But Alhaji Umar Dembo, former petroleum minister under President Goodluck Jonathan told DW that Buhari was not making a mistake. "As far I am concerned, it is the same NNPC with the same GMD, Group Managing Director, and others which the law stipulates," he said. "All they did was creating these other sections to make them into separate companies but under a holding company in NNPC."

Electricity plant (Photo credit: FLORIAN PLAUCHEUR/AFP/Getty Images)

Petroleum unions want an inclusive dialogue before dissecting the sector

Nigeria is Africa's biggest crude oil producer, but still has to import petroleum products because its four functioning domestic refineries cannot meet local demands. The NNPC regulates prices at the pump and keep them low with subsidies.

Dembo said this new structure could be effective if Buhari puts the right people in the positions. "The problem of Nigerian governance of recent is how trustworthy, how dutiful, how good the workers are, how much do they stand to do the work rather than involving themselves in tribalism, corruption and many other vices. The president is looking for trustworthy people and we should trust him," he said.

Chika Nwaozuzu, political analyst at Kabir Mato University in Abuja said "the government is issuing conflicting reports. The Minister of State [for Petroleum], Dr Ibe Kachikwu, says one thing and the president says another. The NNPC tagged it as reorganization, whereas the government is looking at it as being unbundling."

Nigeria Tankstelle in Lagos (Photo credit: PIUS UTOMI EKPEI/AFP/Getty Images)

Nigeria is Africa's biggest oil producer but still need to import fuel

Nwaozuzu does not say Buhari is making a wrong decision, but he does believe he should have involved the unions in the decision-making process. "It shouldn't be a unilateral decision," he said.

"There are sections in our constitution that vested certain decisions particularly under the petroleum sector on the national assembly. So if you are going to unbundle [the petroleum industry], you have to go first to the national assembly," Nwaozuzu added.

But Nigeria's senate on Thursday threw its weight behind the decision. Many Abuja residents support Buhari's decision, but criticized him for not informing the public. "It is a very good program but the only thing is that he should have sensitized the people before implementing it," a resident said.

"The president has a lot of good plans for this country, but I want to call on him to give a listening ear to PENGASSAN and all other unions in the NNPC that are on strike such that the matter will be resolved without any delay," another resident said.

Ben Shemang in Abuja contributed to this report.

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