FG, Labour Set to War Over Planned Subsidy Removal


The stage is set for titanic battle between the Nigerian workers and the Federal Government over the planned removal of fuel subsidy with effect from January 2016.

Minister of State for Petroleum and Group Managing Director of Nigeria National Petroleum Corporation (NNPC) Ibe Kachikwu had said last week that from January, the down stream petroluem industry would be fully deregulated.

However, the umbrella body of Nigeria workers, the Nigeria Labour Congress (NLC) said Tuesday, the body would give the President Muhammadu Buhari’s administration a running battle if it went ahead with the plans.

It said that any attempt by government to adjust the fuel price in the country without recourse to the institution legally authorized to do so would be considered unlawful.

The NLC General Secretary, Peter Ozo-Eson, said government officials and some chieftains of the ruling All Progressives Congress have in the past few weeks made discordant tunes about the future of petroleum products prices and the management of the subsidy scheme in the country.

The NLC said Kachikwu had initially announced that come next year the price of petrol would revert to ₦97 per litre, while fuel subsidy would be phased out.

However, Ozo-Eson noted that two days later the Minister had denied the report, claiming that what he said was that fuel price would operate within a band of ₦87 and ₦97, which he said did not mean subsidy removal.

“The same minister now says that the price of petrol will now be ₦85 in January, signifying the deregulation of the sector,” Mr. Ozo-Eson said.

“These vacillations and flip flops are, in our view, designed to confuse Nigerians and pave the way for deregulation of petrol prices through the back door.”

He noted that as long as the country continues to depend on imported refined petroleum products, the decision by government to deregulate the petroleum sector and abolish the subsidy scheme would unleash untold hardship on Nigerians.

He added that the determination of the recommended prices of petroleum products was, by law, the responsibility of the Petroleum Products Prices Regulatory Agency, the NLC said none of these contradictory prices by the Minister was a product of the agency.

PPPRA is the government agency charged with the responsibility of monitoring and regulating the price of petroleum products in the country.

The NLC said despite repeated demands for the reconstitution of the board of PPPRA, the government has refused to do so for over two years, thereby ensuring the agency did not perform its role for the period.

“We call on the government to be guided by the rule of law and constitute and convene the board of PPPRA in accordance with the law without further delay. This will enable the agency to examine and agree a new pricing template based on the realities of today,” the NLC said.

While restating its opposition to any attempt by government to increase the price of fuel or remove subsidy on petrol, the NLC said “any price unilaterally determined and announced by the Minister is in violation of the law.”

The labour movement said it has already directed State Councils and Industrial Unions to commence the process of mobilization prior to a meeting of the National Executive Committee to be convened in the New Year to respond to ensure appropriate response to government’s action on the issues.

The Minister, who had broken the news of the planned deregulation during a tour of the Port Harcourt refinery on Christmas Day, said the Federal government is working to reduce the pump price of petrol to about 85 or 86 naira per litre by January 1, 2016.

He said efforts were on to get the Port Harcourt refinery to achieve 60 percent production capacity and to supply about 11 million liters of petrol daily.

“If you look at the new PPPRA template that we developed and which I just signed off two days ago, when it is announced you will find out that for now, and I use the emphatic word of the President for now, the price of the refined product will actually be lower than 87 naira, It will be 85. We will probably announce that in January if the prices hold.

“Like I said, we have done a modulation calculation and it is showing us below N87. I imagine that if PPPRA publishes it today, it will become effective immediately. But the 1st of January that is when we are looking at.”

“What that does for you is that its modulating. If it goes up you move up, if it comes down you come down. So we take away the fact of having to go find funds to pay for these subsidies that we cannot afford.

“More importantly we try to be as close today the pump price that we have now as possible,” he said.

Justifying government’s reasons for scrapping the Petroleum Support Fund otherwise known as oil subsidy, Kachikwu explained that government can no longer afford to subsidize the product following the fraud that has attended its operation.

He added that it has become clear that government earnings are dipping on daily basis.

His words: “It is out I signed off on it yesterday (Thursday). I imagined that in the next couple of days the marketers would get advice on that. The nice thing about the PPPRA, where I signed up on it yesterday is that the price will be far below N87.

“So for the first time people will understand that the pricing modulation I was talking about is not a gimmick. It is for real. We have gone to find out how we will be able fluctuate this market to reflect what the reality of crude market is. The objective is that one, we cannot afford to continue to subsidize .

“We can’t even understand where those subsidies were going to. There is a lot of fraud elements in it so we need to cut that off.

“The second is the earning capacity of the Federal Government is deteriorating by the day with lower prices of crude and come out more”, he had said.


Author: News Editor

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