NNPC Operations Shut Down On Account Of N85bn Pension Hole

Operations of state oil and gas operator, the Nigerian National Petroleum Corporation (NNPC) were shut down yesterday, as workers vented their anger over an N85 billion deep hole in its pension purse that has led to the withdrawal of the licence of the corporation’s closed pension by regulators.The National Pension Commission (PENCOM), the custodian of the nation’s pension fund, through a memo signed by its director general, Chinelo Anohu-Amazu, was said  to have revoked the  pension licence of the NNPC Pension Scheme because it failed to bridge the  N85billion gap which  exists in the scheme.Staffers of the NNPC have shut down operations across the country on account of N85 billion in pension liabilities.But the management of the NNPC says it’s doing everything possible to avert the looming industrial action by members of the corporation’s arm of the National Union of Petroleum and Natural Gas,(PENGASSAN)and the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG).The NNPC also urged Nigerians not to engage in panic BUYING of petroleum products.With the  shutting down of  NNPC operations,  the country  faces  the prospect of a  of major crisis in  the oil and gas industry,  which may lead  to shutting down of  all  oil production and also  create fuel scarcity.PENCOM was said to have observed some funding gaps  in the region of about N280 billion in the NNPC pension scheme and  had warned that it would withdraw it pension scheme licence if the gap was not closed.The gap was said to have been reduced to about N85 billion, but  this did stop PENCOM from withdrawing the licence.PENCOM made good its threat on Monday and this prompted the reactions of the two unions, PENGASSAN and NUPENG, which shut down operations of the corporation across the country.“After the expiration of the first 12 months, our DG decided to write the letter herslf to revoke the licence, but after listening to explainations from the management of NNPC, PENCOM decided to grant another 12 months, but I don’t know when the extention will expire,” said a source at PENCON.The workers, it was alleged, feared that some powerful politicians may have been behind the pressure put on PENCOM to withdraw the licence, so that they could have access to the fund, especially now that elections are just around the corner.Some industry watchers say that if the situation is not properly handled, it might result in members of both PENGASSAN AND NUPENG working with international oil companies, joining the strike in sympathy with their colleagues in the NNPC.The implication of this is that oil production platforms and loading terminals may be shut down. This would affect the nation’s projected revenues, as crude exports could come to a halt.BusinessDay  investigations  revealed that work at most NNPC locations,  including  the four refineries, the Pipeline  Products Marketing Company  (PPMC) depots, Nigerian Gas  Company, Integrated Data Services,  and all other subsidiaries of the  corporation, scattered across the country, could come to a stand still. The NNPC headquarters in Abuja was shut down as at 1.00 pm on Monday, so were the agencies other offices in other locations yesterday.The workers are  demanding for adequate and regular funding of the closed pension system, immediate steps to carry out turn around maintenance (TAM) on the four refineries, as agreed between government and the two unions, NUPENG and PENGASSAN, and restoration of crude supply to the refineries.According to the Babatunde Oke, PENGASSAN’s media and information officer, there was a total compliance of the strike in all the NNPC locations across the country.Oke said other members of the union may join their colleagues in NNPC, should the issues raised not be addressed, adding that the matter has gone beyond granting of a one year grace to the NNPC by PENCOM.He added that the management of the  NNPC should put in place machinery that would automatically fund the pension system, cutting out bureaucratic bottle necks.He further claimed that the funding had been delayed due to the failure of the NNPC board to meet for over a year to approve the proposal of the management for the funding of the pension system.On the issue of turn around maintenance (TAM) of the refineries,  the PENGASSAN spokesperson said the Federal Government should implement without delay, the memorandum of understanding between government and the unions, to carry out the TAM on the refineries, adding that government promised to commence the TAM in April but “this is September, we have not seen any commitment from the government on this.”The NNPC management in its attempt to douse tensions, said that PENCOM had given a 12-month reprieve to close the gap of N85 billion ,failing which the NNPC closed pension would be traferred to the National Pension Scheme, but  that the  workers insisted on pressing home their demands .The  corporation, in statement on Monday evening,  signed by Ohi Alegbe, group general manager,public  affairs division of NNPC, said that the National Pension Commission had given a 12-month window for the corporation to comply with the Pension Reform Act 2014 as amended.PENCOM had earlier directed the corporation to “immediately take all necessary steps to transit to the Contributory Pension Scheme under the PRA”, it said.It however stated that in a fresh directive dated 15 September, 2014, PENCOM stated: “In order to accommodate your concerns, the Commission hereby grants the NNPC a transition period of 12 (12) months within which to ensure full compliance with the provisions of the PRA 2014”.He said the Corporation appealed to the leadership of the industrial unions to exercise restraint while it embarks on extensive engagement with PENCOM to resolve the issues.