Nigeria Labour Congress (NLC) has warned that it may be forced to withdraw from the dialogue with the federal government over the cushioning of the hardship brought on Nigerians by the withdrawal of petrol subsidy by President Bola Tinubu.
This followed yesterday’s decision by the Nigerian National Petroleum Company Limited (NNPC) to raise the pump price of petrol in its Abuja filling stations, from N537 per litre to N617.
In a statement yesterday, signed by NLC President, Joe Ajaero, the union accused the government of callousness, saying its palliative measures to address the repercussions of the subsidy removal lack transparency.
But Group Chief Executive Officer (GCEO) of NNPC, Mele Kyari, claimed market forces were responsible for the increase in pump price of petrol. Kyari said there was no shortage in product supply.
However, Nigerian Employers’ Consultative Association (NECA) kicked against the upward adjustment of the petrol pump price. NECA appealed to the federal government to lessen the burden on citizens brought about by harsh economic decisions.
With regard to the latest petrol price hike, while rates are likely to be higher in the far north due to transportation cost, they are expected to be slightly lower in the south.
THISDAY observed that at its service stations at the Central Area of Abuja, NNPC’s old price had been adjusted to the new one.
Private filling stations also followed suit, yesterday, adjusting their prices in the Federal Capital Territory, in response to the new price, as early movers rushed to buy the product at the previous price, thereby causing temporary queues in the city.
Many petrol stations in Abuja shut down their operations for a while, as they tried to adjust their fuel pumps to reflect the new price of N617.
In Lagos and Abeokuta, the Ogun State capital, yesterday, queues returned to filling stations following news of the increase in petrol pump price by NNPC. Few independent marketers were seen selling the product at their stations between N570 and N700 per litre, while the major marketers sold at N580 per litre.
Owing to the development, very few vehicles were on the streets in Abuja. Consequently, taxi fare increased sharply from N100 to about N240 per drop.
Tinubu announced the full deregulation of the downstream of the petroleum industry during inauguration on May 29.
The federal government had earlier in the year budgeted N3.6 trillion on under-recovery for the first half of 2023, with the Nigeria Extractive Industries Transparency Initiative (NEITI), recently, disclosing that the country had spent N13.7 trillion on fuel subsidy in the last 13 years.
On Monday, the downstream regulator, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), announced that 56 companies had been licensed to import petrol, thereby breaking NNPC’s monopoly.
Aside the price of Brent crude oil, which has risen from about $74.75 per barrel to roughly $82.74 per barrel this week, the rate at which importers sourced the dollar had also risen from about N460/$ to over N800 currently.
Kyari: Market Forces Responsible for Fuel Price Hike
Kyari blamed market forces for the increase in pump price of petrol from N537 to N615 per litre.
Speaking with newsmen on Tuesday after meeting with Vice President Kashim Shettima at the State House, Abuja, the NNPC boss explained that the increase was not based on short supply of fuel.
According to him, “They are just prices depending on the market realities. This is the meaning of making sure that the market regulates itself. Prices will go up and sometimes they will come down also.
“No, there is no supply issue. It is not a supply issue. When you go to the market, you buy the product, you come to the market and sell it at its prevailing market price. It has nothing to do with supply. We don’t have supply issues.
“We have a robust supply. We’ve had over 32 days of supply in the country. That’s not a problem.”
Kyari declared that market forces would continue to regulate price, saying fuel prices are bound to fluctuate from time to time.
He said, “Yes, what I know is that the market forces will regulate the market. Prices will go down sometimes; sometimes it will go up. But there will be stability of supply and I’m also assuring Nigerians that this is the best way to go forward so that we can adjust prices when market forces come to play.
“I don’t have the details this moment, but I know that our marketing wing acts just like every other company in this business. I know that a number of companies have imported petroleum products today.
“So, many of them are on line. Market forces have started to play; people have started having confidence in the market. Private sector people are importing products, but there is no way they can recover their cost if they cannot take market reflective cost.”
Commenting on the petrol price issue also, Chief Executive Officer, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, said the fuel price increase stemmed from rising crude prices. Ahmed Also cited changes in freight prices alongside other ancillary costs importers incur during distribution.
He said, “So, when you say market forces are working, basically, what it is that you buy; you consider the price of crude going up. A couple of weeks ago, the price of crude was hovering around $70/barrel.
“Now it’s hovering around $80/barrel. So, the crude price also drives the product price. You know, because the importers are importing, they are basing it on the cost of importation plus the freight and other cost elements in terms of local distribution.”
Ahmed also disclosed that 10 out of 56 oil marketing companies recently licenced to import petrol would start supplying effectively from this month through September. This move, he said, would encourage the liberalisation of the petroleum market for all to import within the framework in terms of quality.
According to him, “Ten out of the 56 oil marketing companies have indicated to supply within the third quarter, which is July, August, September. Already, we received some cargoes from these markers: Prudent Energy, AYM Shafa and Emadeb. Emadeb Cargo is arriving tomorrow.
“So, this is just an encouragement to see that the market is liberated and everyone is free to import so long as you are working within the framework, especially in terms of quality.
“But to pricing, as a regulator, we are not going to put a cap on the price, because we are not part of those importing. We are not a marketing company; we are just a regulator.”
NLC Threatens to Pull Out of Talks with FG
Notwithstanding the explanation by Kyari and Ahmed, NLC threatened to pull out of ongoing talks with the federal government on how to cushion the effects of the petrol subsidy removal on its members.
The congress described Tinubu’s proposal to pay National Assembly members N70 billion and the judiciary N36 billion as most insensitive and outright bribery of the other arms of government to endorse his aberrations.
NLC said the federal government seemed bent on forcing the committee negotiating the fuel hike matter to also endorse a predetermined outcome, which would not be palatable to workers and ordinary Nigerians.
Regarding the mode of implementation of the palliatives, NLC said it did not have confidence in how the data for “the never-changing 12 million poorest households was generated neither do we have confidence in the mechanisms being pursued for the distribution of the cash transfers”.
In a statement signed by NLC President, Joe Ajaero, the labour movement said they would not want to waste the time of Nigerians, especially workers, on committees that had already been programmed to fail.
The statement said, “It is important to inform Nigerians that despite having shown our readiness to commence work in the committees, the federal government, which convenes the meetings, is yet to inaugurate the National Steering Committee, thus, stalling the work of the proposed committees.
“If the government had wanted an expedited action, which Nigerians want more, the best approach would have been to quickly inaugurate the committees and allow them do their work. But as we write, nothing has been done, except the continuation of the borrowing spree and subsequent allocation to themselves.”
NLC said it would “not want to continue to be part of the usual charade of committees with outcomes that are never implemented.
“We do not want to provide a cover for government to get away with the hardship it has imposed on the people. We do not want to legitimise impunity.
“As a result, if the government does not want to stop these fortuitous actions that it is pursuing in the name of palliatives, we will be forced to constructively review our engagement with the government on this vexatious issue and take matters in our own hands.”
NLC further stated, “We have restrained ourselves from making further comments publicly on the vexatious issues around the recent, but unfortunate, unilateral hike in the price of Premium Motor Spirit (PMS) in the guise of the so-called subsidy withdrawal, which has unleashed predictably as we had earlier warned unimaginable and unprecedented hardship, sorrow, anguish and suffering upon Nigerian workers and masses.”
It said the federal government seemed to have been misled into believing that resorting to impunity and imperiousness in governance in a democracy was a beneficial option to achieve its stated and unstated objectives.
NLC stated, “It is this belief that we are sure has continued shaping the actions of this government since its inauguration on the 29th day of May, 2023, to continue inflicting mindless and heartless pains on the populace one after the other without the decency of embracing the tenets of democracy, which requires wide and deep stakeholder consultation on weighty matters of state.”
NLC noted that despite provocations by the government after the unilateral withdrawal of fuel subsidy and hike in prices, the workers remained committed to the principles of the rule of law, good conscience, and democracy.
It noted that the proposal to pay National Assembly members the sum of N70 billion and the judiciary N36 billion was the most insensitive, reckless and brazen diversion of the collective patrimony into the pockets of public officers whose responsibility it was to protect the country’s treasury.
The union said, “We believe that this may amount to hush money and outright bribery of the other arms of government to acquiesce the aberration.
“It is unconscionable that a government that has foisted so much hardship on the people within nearly two months of coming into office will make a proposal that clearly rewards the rich in public office to the detriment of the poor.
“What this means all this while is that the government is seeking ways of robbing the very poor Nigerians so that the rich can become richer. There is no other way to explain the proposal to pay a misery sum of N8, 000 to each of the mysterious poorest 12 million households for six months, which amounts to N48, 000, and pay just 469 national legislators N70 billion or about N149 million each, while the judiciary that has about 72 appeal court judges, 33 National Industrial Court judges, 75 Federal High Court judges, and 21 Supreme Court judges and a total of about 201 judges receives a total of N35 billion or N174 million each.
“If these other two arms are projected to receive this, what members of the executive council will receive is better left to the imagination of Nigerians, perhaps, the balance N150 billion will go to them.
“These proposals are not just unacceptable to Nigerian workers but are also dictatorial, thus, undemocratic. It is not a product of social dialogue, which would have produced collectively negotiated outcomes by critical national stakeholders.”
In addition, NLC alleged that the federal government had in the wake of the dispute on withdrawal of fuel subsidy procured “unholy injunction from the courts, which were served us in gestapo style by trucks laden with fully armed soldiers and policemen.
“Nigerians would remember that the federal government had called for dialogue in the aftermath of its disastrous forlorn trajectory in the astronomical increase in petroleum product price and our subsequent call for a nation-wide industrial action.
“We were also witnesses to the actions of the federal government in procuring an unholy injunction from the courts which were served us in gestapo style by trucks laden with fully armed soldiers and policemen.”
The union recalled, “Remember that the $800 million, which was already proposed before the devaluation of the naira by this government, was worth about N400 billion then, but is now worth about N650 billon after devaluation.
“It is from this; it proposes to bring out N500 billion for distribution. The proposal to pay N8,000 to each of the so-called 12 million poorest Nigerian households for a period of six months insults our collective intelligence and makes a mockery of our patience and abiding faith in social dialogue, which the government may have alluded to albeit pretentiously.
“Furthermore, the actions of the federal government show that it does not have trust and confidence in the very presidential committee that it set up to take a comprehensive look at the consequences of the petroleum product price hike and make recommendations on the way forward to ameliorate its negative impacts upon the citizenry.”
In a similar vein, the Katsina State chapter of NLC rejected the new petrol pump price. The state NLC chairman, Dr. Hussaini Hamisu, who disclosed this yesterday, in an interview with some journalists in Katsina, said the development would not augur well for Nigerians.
Hamisu, during the media chat, described the development as another way of aggravating the hardship faced by Nigerians, especially the downtrodden in communities across the country.
He said the primary responsibility of every government was to bring succour to its citizens, “but since this government came in, workers and the general public have been experiencing hardship.”
He added, “I don’t think this increment will augur well for Nigerians. We are not in support of the increment. So, I am using this medium to appeal to the government to critically look at ways of solving this problem.
“Instead of giving N8, 000 to individuals, which I believed those that are supposed to get that money will not get it, the politicians will bring the names of their sons, daughters and their maids to collect it.
“The downtrodden, who are suffering will not get that money. So, the government should consider using that N500 billion to purchase buses that can be distributed nationwide.”
Hamisu said if the federal government could use the N500 billion to purchase buses and distribute them to every state, it would significantly cushion the effect of transportation faced by Nigerians.
He urged the government to, as a matter of urgency, bring human capital development policies and innovations that will tackle the difficulties bedevilling workers and other Nigerians.
Human Rights Writers Association of Nigeria (HURIWA) also condemned the petrol price hike.
HURIWA, in a statement by its National Coordinator, Emmanuel Onwubiko, yesterday, stated, “The silence of Nigerians in the face of cocktails of toxic and elitist economic measures by the newly inaugurated President Ahmed Bola Tinubu will inevitably lead the masses to ‘economic Golgotha’ meaning that the next best meals Nigerians will resort to so as to survive the devastating and excruciating absolute poverty is to eat grass like goats or cows.”
HURIWA condemned the current administration for continuously inflicting economic hardship on Nigerians through many thoughtless and anti-poor policies, “whereas the salaries of public office holders have been reviewed upwards and the National Assembly has just been allocated N110 billion as palliatives to cushion the effects of the withdrawal of fuel subsidy, whereas over 130 million multi-dimensionally poor Nigerian households are abandoned to a cruel fate of constant upward reviews of the pump price of fuel, which inevitably affects the costs of foodstuffs and leads to spiralling inflationary trends.”
NECA also has kicked against the upward adjustment of the petrol pump price from N500 to N617. Director General of NECA, Mr. Adewale-Smatt Oyerinde, expressed this view yesterday.
Oyerinde said it was quite unfortunate and worrisome that the upward review in the price of petroleum was coming at a period when businesses and Nigerians were facing challenges amid rising inflation that was eating away consumers disposable income and talk about impending increase in electricity tariff.
Oyerinde said, “The petrol price going up adds to the burden that not only Nigerians are facing but also the organised businesses. Once the disposable income goes down the ability of average Nigerians to purchase is impaired. And once they cannot purchase, businesses cannot produce or cannot sell what they have produced.
“It is a worrisome trend and I want to call on the government to take a dispassionate look at all these issues. We will reiterate our position that government should not kill those that it is trying to save.
“We are kicking against the price. We cannot continue to be saying that Nigerians should sacrifice, when we are not seeing corresponding sacrificial activities on the side of government.
“We are against this new price adjustment. Let the market take the lead, that is the expectation and not the ‘deregulated regulation’ that we are currently seeing. It is a bit confusing and businesses and Nigerians need clarity on the direction that we are actually going.”