Ahead of the planned nationwide
industrial action by the Nigeria Labour Congress (NLC), the Trade Union
Congress (TUC) and a coalition of the civil society groups on Wednesday
over the new price of petroleum, the federal government has requested
for the understanding of all Nigerians, appealing to the organised
labour to sheathe their sword.
Speaking to journalists in Abuja on
Monday, the Minister of Information and Culture, Alhaji Lai Mohammed,
who was accompanied by the Group General Manager (Group Public Affairs)
of the Nigerian National Petroleum Corporation (NNPC), Alhaji Garba
Deen, said this is not the time for any action that would further worsen
the nation’s economy.
He said the situation that informed the
new regime of the price of petroleum is dire, saying it is a global
crisis, and that the policy was designed to permanently solve the
problems.
‘’For instance, the United Arab
Emirates, the third-biggest oil producer in OPEC, has become the first
country in the oil-rich Persian Gulf to remove transport fuel subsidies.
In addition, the country has announced that with effect from August 1,
2016, fuel prices will be deregulated’’, the minister stated.
‘’Also, in response to fiscal pressure
caused by the fall in crude oil prices, OPEC’s top oil producer Saudi
Arabia has announced a plan to raise fuel prices. You can now see that
this is indeed a global problem.’’
Mohammed said with the drastic fall in
the price of crude oil, which is the nation’s main foreign exchange
earner, drastic reduction in the amount of foreign exchange available,
the unavailability of forex and the inability to open letters of credit —
which had forced marketers to stop product importation and imposed over
90% supply on the NNPC, since October 2015, in contrast to the past
where NNPC supplies 48% of the national requirement, the federal
government had no option than to announce new price of the product.
The federal government’s spokesman
added: “The truth is that the NNPC does not have the resources for, nor
is it designed to meet this increase in supply. The result is the
crippling fuel situation across the country.
‘’Pushed to supply 90% of the products
required for domestic consumption, the NNPC has continued to utilize
crude oil volumes outside the 445,000 barrels/day allocated to it,
thereby creating major funding and remittance gaps into the Federation
account.
‘’As I said earlier, there is no
provision for subsidy in the 2016 Appropriation. The erstwhile PMS price
of N86.50 gives an estimate subsidy claim of N13.7 per litre which
translates to N16.4 billion monthly. There is neither funding nor
appropriation to cover this.’’
The minister added that the renewed
insurgency and pipeline vandalism in the Niger Delta had also
drastically reduced the national crude oil production to 1.65 million
barrels per day, against 2.2 million barrels per day planned in the 2016
budget, saying this had further reducing income to Federation Account
and also affecting crude volumes for PMS conversion and impacting
Federal Government’s forex earnings.
‘’Let me also note that the resultant
fuel scarcity has created an abnormal increase in price, resulting in
Nigerians paying between N150 and N300 per litre as prevalent hoarding,
smuggling and diversion of products have reduced volumes made available
to citizens’’, the minister further stated.
‘’In the absence of available forex
lines or crude volumes to continue massive importation of PMS, it is
clear that unless immediate action is taken to liberalize the petroleum
supply and distribution, the queues will persist, diversion will worsen
and the current prices will spiral out of control.’’
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