After being consulted prior to the
deregulation of the downstream sector of the oil industry, the Nigeria
Labour Congress (NLC) yesterday resolved to join forces with the Trade
Union Congress (TUC) to mobilise Nigerian workers to shut down the whole
country starting from next week Wednesday should the federal government fail to reverse the recent hike in the price of petrol from N86.50 to N145 per litre.
However, in a sign of a major crack in
the labour family, The National Union of Petroleum and Natural Gas
Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff
Association of Nigeria (PENGASSAN) yesterday applauded government’s
decision to deregulate and scrap fuel subsidy, describing the decision
as courageous and long overdue.
They made their positions known at a
press conference staged at the end of their joint National Executive
Council (NEC) meeting held at the Transcorp Hotel in Calabar.
In a related development, Vice
President, Prof. Yemi Osinbajo yesterday stated the rationale behind
the federal government removal of fuel subsidy, saying it could no
longer provide the foreign exchange for the importation of the product.
The NLC threat to shut down the nation
was made after its National Executive Council (NEC) meeting held at the
Labour House, Abuja.
The NLC NEC gave the federal government till midnight of Tuesday within which to revert to the old prices of petrol products and electricity, or face a total nationwide strike.
The congress said there would be formal
communication today in Abuja about the strike option, and that labour
will address all the issues at stake and plans to ground the whole
country.
“The NLC has deliberately delayed their press conference till today (Saturday) in order to liaise with their TUC counterpart, harmonise their positions and jointly address the media,” said a source.
Labour also directed all its affiliate
unions across the states to put in place a monitoring team to ensure the
success of the planned strike.
Osinbajo: we can no longer provide forex for fuel importation
Meanwhile, the Vice President, Prof.
Yemi Osinbajo has clarified that the federal government removed petrol
subsidy because it could no longer provide the foreign exchange for the
importation of the product.
Osinbajo said the issue was not subsidy
removal but foreign exchange problem, and described President Muhammadu
Buhari as one of the pro-subsidy advocates.
In a statement made available yesterday
by his spokesman, Mr. Laolu Akande, the vice president revealed that
since last year, the private marketers had imported little or no product
because they had been unable to get enough foreign exchange from the
Central Bank of Nigeria (CBN).
He noted that until three months ago, the marketers had sourced their foreign exchange from the apex bank at the official rate.
“However, since late last year,
independent marketers have brought in little or no fuel because they
have been unable to get foreign exchange from the CBN. The CBN simply
did not have enough. (In April, oil earnings dipped to $550 million. The
amount required for fuel importation alone is about $225million!),”
Osinbajo said.
“I have read the various observations
about the fuel pricing regime and the attendant issues generated. All
certainly have strong points. The most important issue of course is how
to shield the poor from the worst effects of the policy,” he added.
Providing further explanation to justify
the measure, Osinbajo said the real issue was not a removal of subsidy,
adding that a $40 a barrel there was not much of a subsidy to remove.
He described President Muhammadu Buhari as probably one of the most convinced pro-subsidy advocates.
“What happened is as follows: our local
consumption of fuel is almost entirely imported. The NNPC exchanges
crude from its joint venture share to provide about 50 per cent of local
fuel consumption. The remaining 50 per cent is imported by major and
independent marketers,” he said.
According to him, the NNPC tried to cover the 50 per cent shortfall by dedicating more export crude for domestic consumption.
He said besides the short term depletion
of the Federation Account, which is where the federal government and
States are paid from, and further cash-call debts pilling up, the
corporation also lacked the capacity to distribute 100 per cent of local
consumption around the country.
Osinbajo added that previously, NNPC was responsible for only about 50 per cent.
“We realised that we were left with only
one option. This was to allow independent marketers and any Nigerian
entity to source their own foreign exchange and import fuel. We expect
that foreign exchange will be sourced at an average of about N285 to the
dollar, (current interbank rate). They would then be restricted to
selling at a price between N135 and N145 per litre.
“We expect that with competition, more
private refineries, and NNPC refineries working at full capacity, prices
will drop considerably. Our target is that by Q4 2018 we should be
producing 70% of our fuel needs locally. At the moment even if all the
refineries are working optimally they will produce just about 40% of our
domestic fuel needs,” Osinbajo explained.
The vice president said he did not
mention other details of the PPPRA cost template because he wanted to
focus on the cost component largely responsible for the substantial
rise, namely foreign exchange.
“This is therefore not a subsidy removal issue but a foreign exchange problem, in the face of dwindling earnings,” he added.
PENGASSAN, NUPENG back FG, demand N90,000 minimum wage…
National President of NUPENG, Comrade
Igwe Achese, who addressed journalists on behalf of both bodies,
described government’s decision to deregulate the downstream sector as a
courageous policy that was long overdue.
“The deregulation of the sector is what
we have been agitating for, for the past eight years or more. But each
time we want to react, Nigerians want to live on the bedrock of lies.
And that has been our problem. We have been living on the bedrock of
lies. Successive governments come in, what we hear are full of lies. The
oil and gas sector must have transparency and it is only when it is
transparent that the nation’s economy will begin to grow and job
opportunities would be created.
NUPENG and PENGASSAN however said that
they would push for a new minimum wage of N90,000, given the new
development. “With the new pump price of N145 per litre, government must
speed up the negotiation process for a new minimum wage of N90,000 to
cushion the effect of the envisaged inflation. As the price of fuel
increases, there should also be an increment in workers’ salary as the
old minimum wage of N18,000 has no effect again,’’ they stated.
Oyegun Begs Nigerians for Understanding…
Following negative reactions to the
sudden increase in the price of premium motor spirit, the National
Chairman of the All Progressives Congress (APC) has appealed to
Nigerians, labour unions and other civil society groups to show
understanding on the situation that has led to removal of subsidy.
Oyegun who spoke to journalists in Abuja
yesterday said Nigerians have a right to subsidy on oil but that over
time, the subsidy regime had become so abused that it was no longer
operating in the interest of the Nigerian public.
Meanwhile, an industry expert who
declined to be named speaks further on the fuel subsidy controversy: “A
lot of people have been asking the question about the difference between
the attempt by Jonathan to deregulate in 2012 and what Buhari has done
in 2016. Some people are trying to be partisan with this issue but the
truth of the matter is that we are talking about two very different
situations and I will break them down to economic and political.
“On the economic standpoint, let’s first
start from the beginning. Nigeria’s petroleum consumption is about 40
million liters per day. Our four refineries working at hundred per cent
capacity only provide 18 million liters per day therefore we must import
the balance of 22 million liters per day more than our local production
capacity. So anybody that says we are only importing because the
refineries are not working is not correct factually. We are importing
because our refineries cannot provide the consumption capacity.”
Naira Depreciates Further on Fuel Subsidy Removal…
The Naira continued its downswing on the
parallel market yesterday as it fell to N350 to a dollar yesterday,
lower than the N341 to a dollar it closed the previous day as oil
marketers scramble for foreign exchange following the new template for
petrol importation that was fixed by the PPPRA.
The sharp decline was once more blamed
on the government’s announcement of the removal of fuel subsidies and
the green light given to oil marketers to source their forex
requirements from parallel or autonomous market sources.
Some currency traders predicted that the
currency would continue to depreciate on the parallel market in the
coming days as pressure of forex demand mounts.
The CEO, Financial Derivatives Company
Limited, Mr. Bismark Rewane had said the parallel market does not have
the depth to fund the importation of petroleum products, arguing that
the central bank needs to find a way to continue to fund petrol
importation.
“If they say they can’t fund the importation of petrol from the official market, then why do we have that market?
“But the government cannot push the
funding of petrol to the parallel market because the market does not
have the depth to fund the importation of petrol. “What we will see is a
situation where the NNPC will be selling petrol at a different price
while other marketers would be selling at a different rate, thereby
creating a dual exchange rate regime,” he added.
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