Nigeria rescinds decision to sell refineries, oil unions drop strike threat

January 08, 2014 | Government & Regulations, Management

Dr. Goodluck Jonathan, Nigeria's President

Dr. Goodluck Jonathan, Nigeria’s President

Lagos, Nigeria – The Nigerian government will not sell and privatize its four ailing oil refineries, the   labour minister Chukwuemeka Wogu said Wednesday, prompting the country’s two powerful oil workers’ unions –  Petroleum and Natural Gas Senior Staff Association PENGASSAN and the  Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) to declare that they have now dropped plans to embark on a nationwide strike intended to cripple crude oil production and exports.

“The Federal Government is not selling the nation’s refineries,” Wogu said in a statement issued after a meeting with the unions in Abuja.

The government called the meeting after the unions had threatened to begin a strike this week aimed at forcing the government to reverse earlier announcements by two government agencies that Nigeria would commence the sale of the state-owned refineries by first quarter of this year.

“After extensive deliberations on the situation with the refineries, the two parties agreed that…the unions shall not embark on any form of industrial action over the subject matter,” Wogu said.

The PENGASSAN President  also said in the statement that the union, along with its junior counterpart, NUPENG, were calling off the strike plan and were satisfied now that there was a commitment by the government not to sell the refineries.

The unions on Monday demanded a written commitment from the government to halt the plan to sell the refineries, failing which they would start mobilizing workers for a strike.

Nigerian oil minister Diezani Alison-Madueke had announced in November that Nigeria would begin the process of privatizing the refineries by the first quarter of this year, while the state privatization agency, the Bureau of Public Enterprises (BPE) followed up by unveiling last month a 16-member committee that would oversee the process.

However, presidential spokesman Reuben Abati was reported as saying Friday that the government would not sell the refineries and that the privatization process had not received presidential endorsement.

Nigeria’s four refineries, located in Port Harcourt, Kaduna and Warri, have a combined nameplate capacity of 445,000 b/d, but have been plagued by ageing infrastructure and poor maintenance, forcing Africa’s biggest crude exporter to import more than 80% of its fuel needs.