Amid citizens’ agony of Wednesday’s shocking removal of petrol subsidy, the Nigeria Labour Congress (NLC) will today articulate its position on the policy and take-off of the petroleum liberalisation policy of the Federal Government. This is coming after Labour’s meeting with the government on Wednesday night ended in a stalemate.
However, to douse apprehension, NLC debunks purported plans to embark on strike today over withdrawal of fuel subsidy. Head of Information and Public Affairs at NLC, Benson Upah, urged members of the public to disregard stories that it would call workers out on strike from June 2 as the stories did not emanate from the Congress.
“Our attention has been drawn to stories circulating in the social media claiming that the NLC would begin protest action on June 2 against the increase in the pump price of petrol. As much as we are outraged by this mindless price increase, which is intended to bring untold hardship to Nigerians, we have no plan to start any action on June 2. What we do have for now are organ meetings slated for June 2 to deliberate on the price issue,’’ he stated.
The Guardian exclusively gathered in Abuja that the national umbrella body of Nigerian workers has summoned its Central Working Committee (CWC) and National Executive Council (NEC) to deliberate on the next line of action.
It was gathered that the CWC meeting will take place first in the morning while the NEC will sit later after that. The NEC is expected to ratify the decision of the CWC.
The meeting with the Federal Government, which was deadlocked on Wednesday night, will resume on Sunday, June 4, at the Aso Rock Villa. It was gathered that today’s meeting may either sanction an immediate strike or give fresh conditions that must be met in the Sunday meeting with the additional mandate of declaring strike immediately without a recourse back to the organs.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) told The Guardian that it will no longer fix prices or release templates for petrol prices. The Authority Chief Executive (ACE), Farouk Ahmed, explained that under the liberalised market, market forces will dictate prices.
Under the new deal, Ahmed said the Nigerian National Petroleum Corporation Limited’s (NNPCL) role is to fix prices of the petrol it imported and not take over the responsibilities of the Authority.
“In the case of the NNPC, the organisation is the sole importer at this point. We told the NNPC to recover its costs because they know how much it cost them to import the product and sell it. Of course, we also know how much shipping, offshore, ex-depot and ex-pump are. But we cannot tell them to sell at a price because the market is deregulated,” he said.
The NMDPRA chief also revealed that the Federal Government has officially scrapped petroleum equalisation as well as the national transport allowance.
Group Chief Executive Officer of NNPC, Mele Kyari, said contrary to speculations, the immediate past government did not make provisions for petroleum subsidy in the 2023 budget. He disclosed this yesterday in Abuja when he met with the Abdullahi Adamu-led National Working Committee (NWC) of the All Progressives Congress (APC) at the party’s National Secretariat.
“There was subsidy in 2022 but in 2023, not a single naira was provided for the purpose of financing the subsidy. And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8 trillion that the federation should have given back to NNPC. The provision of subsidy is there, but absolutely there is no funding for it,” Kyari said, adding that it was only on paper and does not exist.
This, he said, was the true situation of things, adding the Federal Government could no longer bear the burden of fuel subsidy. “If we continue, we will run into defaults and the defaults of NNPC is the default of Nigeria.”
Kyari, while admitting that Nigerians would have problems with the removal of fuel subsidy and that it would impact on inflation, assured that the government was working on putting in place palliatives to cushion the effect.
According to him, President Bola Tinubu has directed some engagements and some palliatives will be put in place soon. Kyari added that the market would stabilise with time following the removal of fuel subsidy and the current pump price when other players came in.
On when the country would have all its four refineries working, Kyari said there was an ongoing process of rehabilitation of the refineries. He added that one of the refineries would come on stream before the end of 2023, while the second one would come on stream in 2024 and the third one would follow thereafter. He maintained that the fuel subsidy regime was gone for good because the government could no longer sustain it.
The House of Representatives has, however, mandated the Auditor General of the Federation to carry out a forensic audit to ascertain whether the sum of N413 billion borrowed from the Central Bank of Nigeria (CBN) for subsidy payments was refunded after the passage of the 2015 budget.
This followed a report of the House Ad-hoc Committee on “Petroleum Products Subsidy Regime in Nigeria from 2013–2022”, which was considered at the Committee and adopted by the House yesterday.
The lawmakers also urged the government to immediately design measures and palliatives to cushion the effects of the subsidy removal for Nigerians through the provision of Compressed Natural Gas (CNG) buses with cheaper fuel consumption.
The House asked the executive arm of government to liaise with the National Assembly to fashion out critical areas of economic development, where the additional revenue from the proposed subsidy removal would be appropriately utilised.
The lawmakers stated: “Government should introduce an intermodal, regional and national transport system to ease mass movement of people across the country.
“Also, NMDPRA should issue stricter and most appropriate regulations as provided in the Petroleum Industry Act (PIA) to ensure that Nigerians are not shortchanged through profiteering.”
Similarly, President Tinubu has been advised to, as a matter of urgency, roll out plans for palliatives to cushion effects of removal of subsidy, which has astronomically increased pump prices of petroleum.
Member-elect of the House of Representatives, Gboyega Nasir Isiaka, representing Yewa North, Imeko/Afon Federal Constituency, urged Nigerians to accept the decision of the government as a way to put the country on the path to economic development.
The investment banker-turned politician, in his reaction to Tinubu’s inaugural speech, said the choice taken by the new administration following the decision of the immediate past administration not to include subsidy in this year’s budget is a tough one, but “the burden has been carried for too long, therefore it is about time to take that bold step. We have to bite this bullet and face it because the loss for us as a country is more than what we are gaining.”
Expressing optimism that the decision to deregulate the downstream of the economy will encourage local and foreign investors to build more refineries in Nigeria and provide more jobs, the lawmaker noted that the removal of subsidy would “reduce the burden on the country’s revenue and help in refocusing the entire fiscal architecture of the nation’s economy.”
RESPONDING to Nigeria’s looming fuel shortage crisis, caused by removal of a government subsidy, Isa Sanusi, Acting Director for Amnesty International Nigeria, has called on the Federal Government to mitigate the impact of the decision for people on low incomes and not exacerbate poverty.
Sanusi urged the Nigerian authorities to urgently put in place measures to protect the rights of people most affected by the removal of the fuel subsidies and prioritise addressing widespread hunger, higher unemployment and the rapidly falling standard of living.
The Amnesty International Chief said President Tinubu’s decision to remove the fuel subsidy has left millions of Nigerians terrified about the knock-on effects that it will have on their daily lives.
“Many are concerned that they will be unable to meet the costs of education, food and healthcare. The government is yet to suggest any ways to mitigate the impact of this decision for people on low incomes,” Sanusi said in a statement issued Thursday.
While the transporters responded swiftly with fare hikes across the country, many public transport service providers have been unable to refuel their vehicles, leaving many people stranded.
“While all countries are required to eventually remove all fossil fuel subsidies to meet their human rights obligations in the context of the climate crisis, they should not do so in a way that undermines the ability of people on low incomes to secure their right to an adequate standard of living.
“It is therefore vital that the removal of the subsidy is accompanied by social cushioning and protection measures”, Sanusi stated. Sanusi said Nigerians should not have to pay the price of decades of political and economic mismanagement of the subsidy scheme. The authorities, he stated, must finally respond to longstanding demands by civil society and parliamentarians to investigate the fuel market chain and hold accountable all those involved in smuggling, hoarding and ‘subsidy scams’, regardless of rank or status.