Last week’s strike by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG) was a huge success. The oil workers’ unions were able to compel government to negotiate terms of payment of the $5 billion it owes oil firms in counterpart funding of their joint venture operations known in industry parlance as cash call.
That would roll back the massive retrenchment in the industry. Other complaints of the oil workers were also addressed during the negotiations. PENGASSAN and NUPENG leaders could beat their chest in apparent victory as the strike is adjudged to have accomplished its mission.
However, the strike threw up a development in the industry that the two unions could only ignore at their own peril. The waning power of NUPENG strike to conjure instant scarcity of petrol became apparent during the six-day stand-off with the federal government. For the six days that the strike lasted, all the fuel retail outlets in the country were selling fuel with all their pumps. In the days of subsidy, fuel scarcity starts the moment the unions call out their workers on strike.
Marketers would sell with one pump and conjure artificial scarcity that would enable them sell at twice the official price. Appropriate pricing of fuel and the consequent plummeting patronage have ended all that.
The Nigerian National Petroleum Corporation (NNPC) panicked as the oil workers’ unions called out their comrades on strike. Apparently expecting the return of fuel queues, NNPC rolled out a statement calling on motorists to desist from panic buying as there was enough fuel in stock.
The warning turned out to be irrelevant. Even if there were isolated cases of panic buying, fuel queues failed to return. In the past, scarcity was largely blamed on panic buying. But the last strike managed to convince even the managers of NNPC that the fuel scarcity that crippled the economy during the days of fuel subsidy was mostly caused by hoarding rather than panic buying.
That is the only explanation for a situation where the two unions in the upstream and downstream sectors of the oil industry were on strike for six days and fuel was not scarce for one minute in any part of the country.
For the six days that it lasted, people only knew about the strike from the reports in the news media. The reason is that the petrol market is now a buyers’ market. Retail outlets that used to collect levies before allowing motorists to cross their iron gates now lure them with various price cuts, though most of them compensate for the cuts by programming their pumps to under-dispense.
The hoarders (retail outlets and depot operators) are now begging for patronage. There is no room for hoarding.
Besides, the removal of subsidy has knocked some economic sense into the heads of Nigerian motorists. With the devaluation of the naira escalating inflationary trend in the economy, people are now left with little money to spend on fuel even in the face of scarcity. Sanity has consequently returned to the market as motorists now put economic value on all their trips before embarking on them.
Cars now enter the roads only when it is absolutely necessary.
PENGASSAN and NUPENG leaders themselves might have learnt vital lessons from the last strike. Under the current dispensation, it may take the oil workers’ unions something close to two weeks of persistent strike to conjure the return of long queues at fuel retail outlets. By halting gas supply, they may instantly shut down the power generating plants and consequently throw the nation into darkness.
They may even halt oil exports within hours of calling out their comrades on strike, but it would take them several days of strike to cause fuel scarcity. The reason is that the appropriate pricing of fuel has reduced consumption drastically.
One source stated last week that fuel consumption in Nigeria has dropped by 30 per cent. Retail outlet operators are groaning because of low patronage. The stock of fuel in retail outlets can now run the economy for four days in the event of a strike by tanker drivers. And the operators are willing to sell regularly because it takes a whole week for some of them to exhaust the 33,000 litres of petrol delivered by one truck. That is the consequence of appropriate pricing of petrol.
In the event of tanker drivers’ strike, retail outlet operators know that matters could be sorted out within three days and that supply would return immediately after that.
They would therefore not be willing to tie down their money by hoarding fuel on the mere pretext that tanker drivers would not lift fuel for three days.
The lesson from the last strike is that NUPENG might have lost its most powerful instrument of black mail. The leaders of the union might have to return to the drawing board to fashion out a new instrument of black mail that would instantly conjure the usual one-kilometre queues at fuel retail outlets in a bid to rail-road the government to the negotiating table.
