Obong Essien Esema is the Senior Special Assistant to Governor Udom Emmanuel on Petroleum Matters and chairman of the Petroleum Products Monitoring Committee in the state. He had predicted that the only solution in the petroleum sector of Nigerian economy was de-regulation. Few days after his prediction, the Federal Government announced de-regulation of the sector. In this follow up interview Esema had with the Publisher/Editor-in-Chief, RADAR Newspapers, Otuekong Franklyn Isong, he proffers more solutions to ending the crisis in the Petroleum sector.
Good afternoon, Obong Essien Esema, how were you able to resolve the issues surrounding the petroleum scarcity in the state, Sir?
You would recall that the crisis occurred as a result of misunderstanding between NUPENG/PENGASSAN as a union and the Universal Energy Resources Limited, Akwa Ibom State. They accused Universal Energy of wrongfully downsizing their members as a result of declaration of redundancy in the company, whereby about 28 staff who were members of NUPENG and PENGASSAN lost their jobs. So they decided to embark on strike. Fortunately, and glory be to God, His Excellency, the Governor, Deacon Udom Emmanuel waded into a misunderstanding between the union and a private company and resolved it. Most people do not even know that Akwa Ibom State has no business in that thing, but as a responsive government which cares for the well-being of the people, the Governor had to step in. And that’s how we were able to bring peace after the negotiation and the union then called off their strike. And prices have also come down again.
People say there’s no Depot in Akwa Ibom; that we don’t have a Depot which has enough capacity to handle our large population. What is your response?
It is a fallacy of generalization to say that we don’t have a Depot in Akwa Ibom State because we do have. Let me inform Akwa Ibomites that we have private Depots at Ikot Abasi. In fact, we now have two of them, one belonging to Fresh Energy and the other one Slug Oil and Gas. The truth of the matter is that, the Fresh Energy Depot I’m referring to at Ikot Abasi has become dysfunctional as a result of the building up of the waterways between the private energy and the Estuary Rivers. You have to bring in vessels to offload, and it requires dredging of about 3 nautical miles, between that place and the Imo River which empties into the Atlantic. The dredging was supposed to have been handled by the federal government, that is inland waterways and we had made representations in the days of former Governor Godswill Akpabio to the Niger Delta Development Commission (NDDC), asking them to come and dredge that area without any success.
The ALSCON which also enjoys that waterways, is supposed to dredge it. That would have been shaped by other commuters in that area. Unfortunately, because ALSCON has not been operational for a while now, even the federal government has not cared to dredge that Estuary, in fact, on inspection one day and I saw a vessel that was sunk because of the low track the ship could not make it through and the ship was stuck there for a month, and when a ship sinks like that, you have to empty the entire products which amounts to a loss to the owner of that products and so, with all these, nobody would want to risk bringing in products again.
So what they do is to bring in some products through badges that will carry few thousands of litres of diesel so the place is not functioning optimally. That is why we don’t use it much. Calabar Depot, apart from the fact that they have clear sea route, they also have a pipeline that takes products down to Calabar by pipe and so because of that, Calabar has a steady supply of products.
You know it is also easier and more economical to use vessels so when they bring in the products, people prefer to take it to Calabar, rather than to come and sink. So that is why we don’t have functional Depot. I also wish to say that there are two new Depots under construction, you must have heard of the Depot at Ibaka area, it’s a private Depot. I know why they are choosing that area. Those people are wise because they are still anticipating that the Ibaka Deep Seaport will come on, so it will be quite helpful.
There are reports that the state government would construct international jetty and refineries, please would you shed more lights, what is the true position?
What has happened is that His Excellency, the Governor, has obtained license to construct International Jetty at Ikot Abasi. That is what was given out as news. His Excellency has attracted three private investors to come in and set up refineries in the state. So there are two different things; to get a license for jetty and to attract investors for private refineries.
Let me take you to the Governor’s one year in office, how would you assessed his performance in one year?
In one word, fantastic! He has done well, despite the fact that he is receiving 50% of what was received before he came on board. His Excellency has done well. You won’t forget that he is still doing training for the youths, empowerment for the women and a whole lot of things. He is using his wisdom as a talented banker for the benefit of Akwa Ibom State in terms of the frugal and prudence management of our little resources.
If you were to advise the Governor on what he should focus more attention on, what would that be?
I would advise him to focus on poverty alleviation because it’s not easy to eradicate poverty. His Excellency has rightly diagnosed that the existing systems and programmes on poverty alleviation have not yielded the desired results. So, we need to re-strategise in that area. Doling out money will not be the solution; he should develop more on government scheme, skill acquisition, gas and agriculture. Through these, lots of opportunities will be opened to the masses and down trodden. Let the people be able to fish and not talk about giving them fish.
On road networks…
That’s what I said. I don’t know where he gets the money. We would have been quite contented with the level of industrialization. He has done a lot under industrialization, but he is going ahead to do other things in the state. To be honest to ourselves, we have enjoyed a more steady power supply in our state, than most other states including Abuja. I want to say in answer to your question, that you cannot talk of industrialization without the gateway and the gateway to industrialization is good road network, Airport and Seaport. His Excellency is still within bounds of providing the enabling environment for industrialization to thrive in Akwa Ibom State, by providing these gateways. He is being very strategic in his plan.
If you were to score the governor’s performance with percentage, what would be your score?
I know that if I score him, people will say he is an Udom man, but without prejudice for the love to my Governor, the fact is that even though I’m his own aide, he has performed to earn “A1” so I will score him “A1”.
Some weeks ago, we had an informal discussion on the petroleum crisis affecting the nation. You seemingly proffered solution by advising the federal government to completely deregulate the downstream sector so that private investors can come into the nation and invest in the sector. Few days after our discussion, the federal government announced deregulation of the sector and did exactly what you told me. What is your take?
I was saying that the way out was unless the federal government comes out straight to tell Nigerians the truth that we will not get out of this and the truth is that, we could not continue with the then subsidy regime. Unless we remove subsidy; deregulate the downstream petroleum sector that, we will not get out of this crisis. If you are in the sector, just like I am; you will know that subsidy was uncalled for in Nigeria.
First of all, who enjoyed the subsidy? You and I know that it is very rare to find fuel at the controlled rate in most cities of the country apart from few NNPC stations. Even the government at a stage became frustrated and it came to a point where the government attempted to take over the market. This is the only country that subsidises consumption. You don’t subsidise consumption. Why don’t you subsidise my wife’s hair cream so that she can have cheaper hair cream? So why do you subsidise one aspect which is petroleum? It is not done. The way out of this, is for the federal government to get its hands off the downstream petroleum subsector by withdrawing totally from regulation.
What they have done so far is still a hard breakthrough. It is what I call partial de-regulation, if you have to de-regulate it, allow the whole thing to run, even if, it started from N200 per litre, within three months, you would have noticed that it has crashed because of competition. So what they are doing is still hand on the throat. I’m happy that immediately I said it, two days after, it happened.
How do you see the federal government’s subsidy removal policy?
There are two things the government is trying to do now. Government said it was removing subsidy. Which subsidy are you removing when crude oil is selling at less than 40 dollars per barrel at the international level? We are saying totally remove your hands from this sector, allow minimal control, but that does not mean that government should not look into what is going on there. Just like what NCC is doing to the communication sectors, it becomes a regulator. You don’t allow people to short-change Nigerians; you don’t allow marketers to go haywire. You regulate them with rules, but for you to start fixing prices again, you are still controlling the system and this might be good for NUPENG and PENGASSAN, because they will make a huge profit, that’s why they will never oppose this one, because the government has fixed prices that are favourable to importers, but it’s not deregulation as such.
Unfortunately, in Akwa Ibom state, we are still buying fuel at N150 – N160 and incidentally you are the chairman of the Petroleum Products Monitoring Committee…
(Cuts in) There is none. They are selling at N145, since the pump price was announced by the federal government. In fact, NNPC is selling at N135 per litre. It is the government’s directive everybody must obey including my office. We must enforce it. So we are saying you can sell below N145 per litre, but there’s no where anybody, whether major or private is selling above N145 in the state as approved by the federal government, except otherwise stated by the federal government.
What would be the gains of this new pump price?
A whole lot, if it is well handled. Why were there no refineries established before now, because more than ten companies obtained licenses under President Goddluck Jonathan’s regime and yet, there was no refinery established during the period. You know why? It was because when Jonathan wanted to remove subsidy which could have favoured this kind of thing that we are doing now; the kind of regime that is attracting investors, some people stood up, out of political sentiment to oppose that policy; that would have helped us today. President Goodluck wanted to lay a foundation that would have been good enough for the incoming government, whether he won again or not, but some people were too myopic to see his patriotic instinct and where he was going. By now, all what we are talking about would have been history.
Why were no refineries when Jonathan was giving licenses? Because nobody will come and establish a refinery under the outreach of international sales and then you are coming out at the local level to fix the price for his output. His input is the crude oil which has an international rate. There is no local rate for crude oil, unless you decide to tag somebody in your country as a producer. But here in Nigeria, an investor will come and ask you, will you allow me to sell the product the way I think, I can sustain my business? You say no, you cannot sale it above N86, he now said okay! Keep your license.
So one advantage of this policy is that, more finance will come in, His Excellency Udom Emmanuel saw it coming. He is a smart business man and he decided to start a refinery in the state. Those ones will be pioneer private refineries that will make it. Others would now see how they have benefited out of that and rush in and join. Even if, we have 30 refineries in the country, the person will still benefit because we have large consumption for petroleum products in Nigeria with over 140million people. I think it is a large market, so that is one benefit.
Other benefits include the fact that you now have products readily available. The scarcity will be cut. The issue of having somebody in the corridor of power before you can have products will be put to rest. As I’m talking to you now, I have somebody that wants to bring in about 30 million litres of petrol, something that I have never thought about before. If he has a place to store in Akwa Ibom State, can’t you see that we have solved the problem of scarcity of fuel already? We will have surplus and when you have surplus of products, the price will fall. But, for the fact that they have fixed the pump price, it would have fallen on its own to a level that everybody will know that if you make N5 profit a litre, that should be enough.
Economic benefit including employment, will come in, growth in GDP and a whole lot of them. You know Refinery can employ up to 1000 people per Refinery? There are so many benefits in deregulation.
Do you support Modular Refineries?
That’s what most of them are doing now, because if you want to go to the conventional refineries which have to be designed specifically for you, which have to take years or months for it to be constructed then, you might not be able to really get there soon enough. But modular refinery within six months to one year, you can easily set it up and start production. Pipeline vandalism is a big problem.
How do you think the federal government should tackle the pipeline vandalization in the Niger Delta?
Let me be very open to you. What is difficult in securing our pipeline? When you have sophisticated monitoring technology in terms of equipment, that you will just attach to the pipeline, for instance, and Mr. President will sit in his office and be monitoring the pipeline. Can’t we think a bit outside the box? Can’t we go in there and get somebody, a Nigerian, who could design security software that will protect the entire pipelines in the country? And this means that you attach the thing in the pipelines and sit down in the control room to control it. Sometimes, I get a bit frustrated about how they do things in Nigeria.
We don’t want to think outside the box, all we know is that pipeline should be manually protected. Set up a Special Squad; give them superb training; suitable for the job; let them be versatile with the creeks and mangroves and be able to respond anytime the signal comes.
The President should dispose of some of his jets and buy helicopters to monitor the pipelines, because that’s where the money they use in buying all these jets come from. The Niger Delta militants have an edge, because they know you don’t have anything superior to what they know. The moment they know that you have superior things to fight them; they will succumb and come into negotiation.
Another way is that you should form the agency that will develop the Niger Delta region. Late Yar’adua was somebody who loved Niger Delta and mended it. He would have achieved it, but for natural intervention. When he started the amnesty programme, he succeeded. If Niger Delta region is cleaned up and transformed, there will be less of crisis.
Do you support the NLC’s strike action that had been called off?
I don’t know what they are striking for actually. The only reason is that they should be negotiating with Mr. President that the burden is too much on the workers. To ask somebody to come and pay N145 per litre of fuel in a country that the minimum wage is N18,000 is killing; and Mr. President would have said, “let me raise the minimum wage to maybe N45 or more if you can negotiate.” That’s what we need at this time. You don’t strike for the sake of strike. Because I know the reason they feel compelled to strike is because they have been striking in the past each time there is increase in fuel price.
You are a PDP chieftain from Nsit Ubium, how do you appraise the state congress and national convention of your Party?
What I have noticed in the state as far as PDP congresses are concerned is that people really love and respect the leader of our great party. The leader of PDP in the state today is Governor Udom Emmanuel. Out of respect and love for him everything went smoothly and peacefully. I was in my ward for the ward congress. What we did was option A4. The people that won celebrated and the people that lost congratulated the people that won. The whole matter went in that manner from state to zone. It was done in a family manner and it was very peaceful and commendable. Let other political parties borrow a leaf from PDP.
What about reports of thugs and hooligans hijacking the congress materials…
The reconstitution of the BoT of the PDP said to have been the elixir of the assumed crisis. PDP has always been resolving its problems in a way that baffles Nigerians. Yes! They can go ahead to have disagreements, because it is a democratic institution. In a true democracy, you must allow the other people to vent their anger. But, as far as I’m concerned, with the constitution of the BoT, peace has returned to PDP. Akwa Ibom is PDP; PDP is Akwa Ibom.
Assess the APC led federal government in one year?
I’m talking like a patriot and not as a PDP person and I want to say that the only problem that we have with the APC government is that it is too slow in taking decision. The worst situation is a government not being able to decide. Another issue that is happening is that there is too much talk and no action. We want to see action. Lai Muhammed should tell us what Mr. President is going to commission in his one year in office. He was supposed to have been able to construct an edifice to be commissioned. But one year has gone by, we don’t see anything tangible to really point at.
Where they have scored some points, is that, they have increased tempo in the fight against insurgency and I think, they are sincere in that. There is also political will to fight corruption. How they do it might not be very correct, people accused them of targeting some people in the fight against corruption. But, for me, all I can commend them is that, at least, they have come out openly to fight it to a stand still. These are the areas I can give some kudos to the government in one year.
I would want you to advise the people of the State as we round off this interview session.
You know we are very enlightened set of people in Akwa Ibom State. We are highly educated; we are intelligent set of human beings created by God. So, where you have this kind of people, you have to see a whole lot of activism, people wanting to be heard, most of the people, do not know where to draw the line between politicking and governance. Like His Excellency, the Governor has drawn the line. He stopped all forms of politicking. He selected people to go for training without asking them to bring their PDP cards. I think the rest of the people should also borrow a leaf from the Governor and be matured enough to draw the line. I think we should sensitise and educate our people to draw a line between politicking and governance.