PENGASSAN’s Shutdown of PPPRA Threatens Petroleum Downstream Operations

Unless amicably resolved on time, the brewing disagreement between the federal government and members of senior oil and gas workers union in the Petroleum Products Pricing Regulatory Agency (PPPRA) over government’s choice of persons to head the agency may snowball into a big industrial action that could affect the operations of the country’s downstream petroleum sector.

The workers under the aegis of the Petroleum and Natural Gas Senior Workers Association of Nigeria (PENGASSAN) on Friday in Abuja warned that their complaints if not adequately attended to may lead to a costly industrial action.

Such action, they said could cripple the country’s downstream sector and supply of petroleum products to end-users across the country.

The union had on Tuesday shutdown operations at the headquarters of PPPRA in protest of government’s appointment of two parallel acting heads for the agency. It however said that the disruption of work was strictly observed at the head office for now pending when issues were resolved with the government.

The PPPRA manages the government's pricing policy on petroleum products, as well as regulate the supply and distribution of petroleum products.

The government had after dismissing the immediate past Executive Secretary of PPPRA, Farouk Ahmed, instructed him to hand over to the most senior officer at the agency.

Ahmed in obedience of the order handed over the agency to a certain Moses Mbaba who he said was the most senior officer to stand in pending the appointment of a new chief, however, the government on Monday reportedly sent another person, Sotonye Iyoyo who was alleged to be a staff of the Nigerian National Petroleum Corporation (NNPC) to take over as the agency’s acting head.

The union then latched on such reported grounds that Iyoyo was a staff of the NNPC, an operator which the PPPRA regulates in the sector, to kick against her appointment.

They described the choice as a potential breach of the agency’s operational code and that there was no contrary announcement from the government denouncing the assumption of Mbaba as the acting head of PPPRA.

But while providing updates on the development to the press, the branch chairman of PENGASSAN-PPPRA Unit, Mr. Victor Ononokpono said that the union would want a peaceful resolution to the disagreement, to avoid its potential escalation.

Ononokpono admitted that the union had met with officials of the ministry of petroleum resources who stated that the issues on ground were beyond them and that they would have to wait for the Minister of State for Petroleum Resources, Dr. Kachikwu Ibe to come back from his trips to Saudi Arabia and Qatar.

He stated in what appeared like a new demand from the government, that the union would not welcome the appointment of any persons from any of the operators the PPPRA regulates in the country’s oil and gas sector as its head.

He also said that the union was not pushing for the appointment of any persons from its internal pool of human resources but anyone that was independent and fit to provide the right leadership for the agency.

Ononokpono asked the government to rather look elsewhere for persons with the right competences to head the agency, saying that an appointment of persons from agencies in the sector would further lay on the line the regulatory mandate of the PPPRA.

“The union commenced this peaceful protest on Tuesday, 23rd February 2016 to register its displeasure over the incessant deployment of NNPC staff as chief executive officers to PPPRA, a practice that began in 2008 when the agency’s pioneer executive secretary was relieved of his appointment.

“That change in leadership changed the prospect of the agency in an undesirable way. From that point onward, the independence of the downstream regulator took a continuous slide towards partisanship and collusion,” said Ononokpono.

He explained that the Act which established the PPPRA expected it to become an autonomous agency to primarily regulate the downstream sector, adding that the ministry of petroleum resources had rather chosen to deploy staff from the NNPC to head the agency in the last eight years.

According to him: “At the risk of sounding repetitious, the practice of appointing officers from operating and marketing companies to head a critical regulatory agency like PPPRA is unthinkable.

“It leaves a sour taste indeed. How do you regulate your bosses? How do you query your pay master? How do you align with global best practices? How do you promote control and checks in corporate governance? These are the questions the protest seeks answers to.”