Labour Rejects Govt’s Bid To End N120b Petrol Subsidy

*NNPC: Burden not sustainable
*NLC: Nigerians shouldn’t suffer for govt’s inefficiency

Labour on Thursday night said no to the government’s plan to
fully deregulate petrol pricing because it is no longer able to
sustain the subsidy regime.

The Nigerian National Petroleum Corporation (NNPC) said it
stopped bearing the N120 billion monthly subsidy on the cost of
petrol consumption by Nigerians.

Group Managing Director (GMD) of the NNPC Mallam Mele Kyari said
the subsidy era must end.

He spoke during the ministerial briefing at the State House in
Abuja.

With him were Minister of State for Petroleum Resources Timipre
Sylva and Executive Secretary of the Petroleum Technology
Development Fund (PTDF) Dr Bello Aliyu Gusau.

Sylva on March 16, said in Ibadan, the Oyo State capital that
petrol pricing would be fully deregulated before end of the
year.

“Deregulation of PMS (petrol) has continued to elude us. We
expect that this year, we will be able to achieve that,” he had
said.

The Lagos Chamber of Commerce and Industry (LCCI) backed the
decision to terminate the subsidy but said it should be guided to
prevent a backlash.

Kyari explained that the NNPC absorbs the cost differential,
which is recorded in its books.

He said while the actual cost of importation and handling
charges is N234 per litre, the product sells at N162 per litre.

He said the burden had become too heavy for the NNPC to
bear.

According to him, after talks with the Organised Labour, the
market forces would determine prices of petroleum products.

Kyari said: “We evacuate about 60 million litres per day from
our depots. We are selling at 162 to the litre. The current market
price is N234. The difference between the two, multiplied by 60
million times 30, will give you per month.

“If you want exact figures from our book, I do not have them at
this moment, but it’s between N100 billion and N12 0billion per
month.

“Today, NNPC is the sole importer of PMS. We are importing at
market price and we are selling at N162 per litre. Looking at the
current market situation, the actual price could have been around
N211 that you mentioned and around N234 to the litre.

“The meaning of this is that consumers are not paying for the
full value of the PMS that we are consuming. Somebody is bearing
that cost.

“As we speak today, the difference is being carried in the books
of NNPC and I can confirm to you that NNPC may no longer be in a
position to carry that burden because we cannot continue to carry
it in our books.

“That is why early last year, the full deregulation of the PMS
market was announced and we followed this through until we got to
September when oil prices shifted above N145.

Nigeria Labour Congress (NLC) President Ayuba Wabba said the
Federal Government should not pass the burden of petrol subsidy
withdrawal to Nigerians.

It said Nigerians cannot bear the cost of petrol hike because
they have been impoverished, adding that citizens should not be
made to pay for the inefficiency of the government.

Wabba argued that an increase in the pump price of Petrol would
erode the purchasing power of many Nigerians and further push them
down the poverty line.

He said: “Nigerians also cannot bear it (the cost of petrol
hike) because they are so impoverished that they can’t also bear
the inefficiency of our system for these numbers of years.

“We are the only member of the Operation of Petroleum Exporting
Countries (OPEC) that is importing refined products. It is because
of the inefficiency of governments – both past and present – that
we are not able to fix our refineries.

“For sure, many people have been pushed below the poverty line.
Not only that, anytime you increase the price of petrol, prices of
goods and services will go up and not only that, the purchasing
powers of many Nigerians will also be eroded. It is between the
devil and the deep blue sea.

“There must be a way to make sure that Nigerians don’t suffer
the consequences of what they have not bargained for. Those are the
clear issues i think should come out of these conventions.

“You are aware that economies around the world – including that
of Nigeria – just came out of recession and many businesses are not
doing well or they have closed and many individuals, including
workers, have been pushed almost to the wall.

“The consequences of fuel price hike will be so grievous, it
will bring about instability, insecurity because where families
can’t take care of their needs you should know also that everybody
will be on their own and it will lead to some social
consequences.

“We will not accept a situation where the burden will now be
shifted from the government to Nigerians. We have submitted a
document to point out that 159 countries still subsidise energy in
this challenging period.

“Government must find means to make sure that we don’t transfer
this inefficiency to the Nigerian public.

“The figure (N120b) also quoted are issues that are associated
with the so – called subsidy because even how many litres we
consume per day has remained a controversy. In this type of
situation this is where accountability and transparency comes
in.

“The policy option of continuing to impose higher pay on
Nigerians is not something that can be pushed down the throat of
Nigerians at this very difficult time.”

*NNPC: Burden not sustainable
*NLC: Nigerians shouldn’t suffer for govt’s inefficiency

Labour on Thursday night said no to the government’s plan to
fully deregulate petrol pricing because it is no longer able to
sustain the subsidy regime.

The Nigerian National Petroleum Corporation (NNPC) said it
stopped bearing the N120 billion monthly subsidy on the cost of
petrol consumption by Nigerians.

Group Managing Director (GMD) of the NNPC Mallam Mele Kyari said
the subsidy era must end.

He spoke during the ministerial briefing at the State House in
Abuja.

With him were Minister of State for Petroleum Resources Timipre
Sylva and Executive Secretary of the Petroleum Technology
Development Fund (PTDF) Dr Bello Aliyu Gusau.

Sylva on March 16, said in Ibadan, the Oyo State capital that
petrol pricing would be fully deregulated before end of the
year.

“Deregulation of PMS (petrol) has continued to elude us. We
expect that this year, we will be able to achieve that,” he had
said.

The Lagos Chamber of Commerce and Industry (LCCI) backed the
decision to terminate the subsidy but said it should be guided to
prevent a backlash.

Kyari explained that the NNPC absorbs the cost differential,
which is recorded in its books.

He said while the actual cost of importation and handling
charges is N234 per litre, the product sells at N162 per litre.

He said the burden had become too heavy for the NNPC to
bear.

According to him, after talks with the Organised Labour, the
market forces would determine prices of petroleum products.

Kyari said: “We evacuate about 60 million litres per day from
our depots. We are selling at 162 to the litre. The current market
price is N234. The difference between the two, multiplied by 60
million times 30, will give you per month.

“If you want exact figures from our book, I do not have them at
this moment, but it’s between N100 billion and N12 0billion per
month.

“Today, NNPC is the sole importer of PMS. We are importing at
market price and we are selling at N162 per litre. Looking at the
current market situation, the actual price could have been around
N211 that you mentioned and around N234 to the litre.

“The meaning of this is that consumers are not paying for the
full value of the PMS that we are consuming. Somebody is bearing
that cost.

“As we speak today, the difference is being carried in the books
of NNPC and I can confirm to you that NNPC may no longer be in a
position to carry that burden because we cannot continue to carry
it in our books.

“That is why early last year, the full deregulation of the PMS
market was announced and we followed this through until we got to
September when oil prices shifted above N145.

Nigeria Labour Congress (NLC) President Ayuba Wabba said the
Federal Government should not pass the burden of petrol subsidy
withdrawal to Nigerians.

It said Nigerians cannot bear the cost of petrol hike because
they have been impoverished, adding that citizens should not be
made to pay for the inefficiency of the government.

Wabba argued that an increase in the pump price of Petrol would
erode the purchasing power of many Nigerians and further push them
down the poverty line.

He said: “Nigerians also cannot bear it (the cost of petrol
hike) because they are so impoverished that they can’t also bear
the inefficiency of our system for these numbers of years.

“We are the only member of the Operation of Petroleum Exporting
Countries (OPEC) that is importing refined products. It is because
of the inefficiency of governments – both past and present – that
we are not able to fix our refineries.

“For sure, many people have been pushed below the poverty line.
Not only that, anytime you increase the price of petrol, prices of
goods and services will go up and not only that, the purchasing
powers of many Nigerians will also be eroded. It is between the
devil and the deep blue sea.

“There must be a way to make sure that Nigerians don’t suffer
the consequences of what they have not bargained for. Those are the
clear issues i think should come out of these conventions.

“You are aware that economies around the world – including that
of Nigeria – just came out of recession and many businesses are not
doing well or they have closed and many individuals, including
workers, have been pushed almost to the wall.

“The consequences of fuel price hike will be so grievous, it
will bring about instability, insecurity because where families
can’t take care of their needs you should know also that everybody
will be on their own and it will lead to some social
consequences.

“We will not accept a situation where the burden will now be
shifted from the government to Nigerians. We have submitted a
document to point out that 159 countries still subsidise energy in
this challenging period.

“Government must find means to make sure that we don’t transfer
this inefficiency to the Nigerian public.

“The figure (N120b) also quoted are issues that are associated
with the so – called subsidy because even how many litres we
consume per day has remained a controversy. In this type of
situation this is where accountability and transparency comes
in.

“The policy option of continuing to impose higher pay on
Nigerians is not something that can be pushed down the throat of
Nigerians at this very difficult time.”