Oil prices edged higher again Monday as a planned workers’ strike in Nigeria’s oil and gas industry and the North Sea pipeline outage threatened crude supply to the international market.
However, the planned strike by oil workers under the aegis of Petroleum and Natural Gas Senior Staff Association (PENGASSAN), which was scheduled to commence at midnight Monday, was suspended.
The suspension of the strike followed the intervention of the Director-General of the Department of State Services (DSS), Mr. Lawal Daura; Minister of Labour and Productivity, Mr. Chris Ngige; and Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.
But despite the suspension of the planned strike, nationwide scarcity of petrol was expected to persist as only six out of 28 functional depots operated by independent marketers in Lagos had fuel in their depots.
Reuters reported that a fall in the number of U.S. rigs drilling for oil also underpinned prices, but growth in U.S. crude output cast a shadow over the market.
Brent crude futures, the international benchmark, sold at $63.59 a barrel Monday while U.S. crude futures rose to $57.67.
Brent had traded as high as $63.91 earlier in the day but pared gains after Ineos, operator of the North Sea Forties pipeline, said the crack that shut it down had not spread.
The 450,000 barrels per day (bpd) link that provides some of the physical crude underpinning Brent has been shut since December 11, forcing Ineos to declare a force majeure on all oil and gas shipments from it last week.
Senior oil workers in Nigeria were also scheduled to commence a strike, sparking concerns over exports of crude from the country.
But after holding talks with the federal government, PENGASSAN called off its proposed strike, which was scheduled to start by midnight Monday.
A statement signed by PENGASSAN’s National Public Relations Officer, Fortune Obi, said the suspension was due to the intervention of government officials.
The PENGASSAN statement also noted that Neconde Energy, represented by the company’s managing director and lawyers, in a meeting with the association, had agreed to recall its sacked employees and promised to allow PENGASSAN to exist within its corporate structure.
The Minister of Labour and PENGASSAN “therefore agreed to endeavour to resolve the anti-union posture by other indigenous companies and marginal field operators” while a meeting was fixed for the second week of January 2018 to look at the issues.
PENGASSAN had on December 7 announced its intention to embark on strike due to what it described as “unfair labour practices” and the “seemingly untameable posture” of some indigenous oil and gas companies, including Neconde Energy and marginal field operators by the relevant agencies of government.
But despite the resolution reached by PENGASSAN and government, fuel queues were expected to persist for a few more days as only a handful of depots operated by independent oil marketers in Lagos – Aiteo, D-Jones, Fatgbems, Folawiyo, NIPCO, and MRS – had petrol at their depots out of the 28 functional depots in the state.
Market survey showed that the ex-depot price of petrol at one of the depots was N146 per litre, while others were selling at N143 as opposed to the official ex-depot price of N133.28.
However, major marketers such as Conoil, Oando, Mobil, MRS, Total, and Forte Oil sold at the official price but to only their dealers.
Based on the high ex-depot price, some retail outlets were forced to sell a litre of petrol above the N145 pump price while stations adjusted their pumps to shortchange customers.
Following the nationwide scarcity, the Nigerian National Petroleum Corporation (NNPC) Monday restated that the federal government has no plan to increase the pump price of petrol.
Speaking during the inauguration of a new mega filling station built by Northwest Petroleum and Gas Limited along the Lagos-Epe expressway in the Ajah area of Lagos, the Group Managing Director, NNPC, Mr Maikanti Baru, represented by the Managing Director, Retail, NNPC, Mr Yemi Adetunji, assured Nigerians of the availability of petroleum products in the country.
“Once again, I would like to urge Nigerians to avoid any panic buying as there are sufficient petroleum products available, and report any case of hoarding or profiteering to the appropriate authorities,” Baru said.
Baru congratulated the managing director of Northwest Petroleum on the successful construction and inauguration of the mega station, saying the new station would boost NNPC’s efforts to ensure the availability of petroleum products to Nigerians.
Also speaking during the inauguration of the facility, the Managing Director, Northwest Petroleum, Mrs. Winifred Akpani, said the mega filling station was constructed as part of the organisation’s quest to expand its retail business in strategic and high impact locations in major cities across the country.
Akpani noted that the expansion plan would not be complete without another mega filling station in Lagos.
She stated that the company has made significant progress since its inception, pointing out that it had moved from the supply of diesel in 200-litre drums 19 years ago to loading out a daily average of six million litres.
She urged the federal government to deregulate the downstream sector of the economy, stressing that this would lead to the rapid development of the sector and the economy at large.