PENGASSAN says Costly Foreign Exchange Denying Nigerians Benefits Of Local Refining

Petroleum and Natural Gas Senior Staff Association of Nigeria, (PENGASSAN), has appealed to the Federal Government to address the high cost of Foreign Exchange, (FX), noting that the costly FX has denied Nigerians the benefits of local refining especially the cost of Petrol.

President of PENGASSAN, Mr. Festus Osifo made the appeal at its National Executive Council, (NEC), meeting in Lagos, adding that the high cost of foreign exchange following the devaluation of the national currency was responsible for the high of essential commodities and other social services.

Osifo who is also the President of Trade Union Congress of Nigeria, TUC, urged the government to expand the nation’s revenue base towards a greater prosperity

President of PENGASSAN, said “Beyond facilitating energy security, fixing the refineries will provide primary and secondary jobs. We will also have the opportunity of getting a lot of foreign exchange when these refineries are working, because the value chain is quite enormous.

“For us in PENGASSAN, we will continually push until all the refineries are working.

“We have been told that repairs works are ongoing at the new Port Harcourt Refinery and the Kaduna Refinery. We urge the government to step up the works because it will boost job creation and reduce the demand for foreign exchange.”

Commenting on why the increasing in the local refining capacity has not reflected significantly on the pump price of products, Osifo said the real challenge was the high cost foreign exchange which affects the cost of production.

In his words: “If the exchange rate is about N1000 to a Dollar, the price of PMS (Petrol) will not be more than N500 a liter. The same thing will be applicable to Diesel and Kerosene. God forbids the exchange rate goes beyond N2000 to Dollar, the pump price of PMS may rise to N1,300 or above a liter. As at today, what the local refining has done to us is just the elimination of the logistics that are associated with importation of refined products. Unless the foreign exchange is properly management, whoever says the price of fuel will come down is lying.

“Crude is a USD (United States Dollar) international product. Even if the crude is sold to local refiners in Naira, noting will change because it is paid in the USD equivalent. So, it is based on international market value.

“In December there was a slight downward adjustment in the pump price of PMS and others because of the appreciation of the Naira in the international market. Today, the Naira is depreciating and there is every indication that there will be an upward adjustment in Pump price because the crude price has gone up.  Therefore, that we are producing locally does not mean that the pump price of PMS will go down.”