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The Federal Government and the Nigerian Labour Congress have differed on the planned removal of fuel subsidy and eventual increase in the pump price of the product in Nigeria
The Minister of Finance, Budget and National Planning, Zainab Ahmed, had Wednesday said the Federal Government can no longer sustain petroleum subsidy cost which currently stands at over N250 billion monthly.
The Nigerian Labour Congress said the planned removal of fuel subsidy would leave Nigerian workers in the lurch because it would be import driven.
The Minister, who while briefing State House Correspondents on Wednesday on the resolutions reached after the Federal Executive Council (FEC) meeting, presided over by President Muhammadu Buhari, at the Presidential Villa, Abuja,said matters have even become worse because the Nigerian National Petroleum Company (NNPC) is remitting almost zero allocations into the federation account.
She said: “So the Petroleum Industry Act, has a provision that all petroleum products must be deregulated. And in the 2020 budget, we made a provision to assume that at the maximum by the end of June, we must exit subsidy. So this last FAAC the subsidy cost to the Federation was N243 billion. So if we look at a cost of about 250 billion per month, and it has been increasing consistently. So we’re expecting something around N120 billion per month from NNPC. And now we’re getting to a point where NNPC is remitting near zero. And if we don’t stop we will get to a point where they will tell you pay me this for managing the fuel provision in the country.
“So if you take 250 billion times 12 months, that is about N3 trillion. If we don’t remove that, that is what it is costing us. This is money that we can use to apply to health and to education.
“The intervention we want to provide, it’s for between 20 to 40 million people and there is still a lot of work going on. We have a committee that is chaired by His Excellency the Vice President, state governors and a few of us ministers as members. So we have to have a landing as to the exact number between 20 to 40 million.
“We already agreed it will be N5000 and we have also agreed that the remittances have to be done digitally. So the e-naria will help, but also so are the various payment platforms that are currently available. What we will not do is paying people in cash. So the transfers that people will receive through one kind of electronic money or the other and it’s meant to be for a period of six, nine or 12 months. So these are things that we are still in negotiation because it’s still money that would have to come from the Federation account. So everybody that is a member of FAAC will have to agree on the numbers. The maximum will be 12 months, the minimum will be will be six months.”
Faulting the Minister’s position,President of NLC,Comrade Ayuba Wabba,said it was difficult to convince Nigerian workers why our dear country is the only country among the OPEC member countries that cannot produce its own refined petroleum products and thus adopts the neo-liberal import production model of refined petroleum products.
According to him,the only benefit of deregulation based on import driven model is that Nigerian consumers will infinitely continue to pay high prices for refined petroleum products.
He said the development will definitely be compounded by the astronomical devaluation of the Naira which currently goes for N560 to 1US$ in the parallel market.
He added that the contemplation by government to increase the price of petrol by more than 200% is a perfect recipe for an aggravated pile of hyper-inflation and astronomical increase in the price of goods and services.
This,he said,will open a wide door to unintended social consequences such as degeneration of the current insecurity crises and possibly citizens’ revolt.
He said :”The argument that the complete surrender of the price of petrol to market forces would normalize the curve of demand and supply as is being wrongly attributed to the current market realities with cooking gas, diesel and kerosene is very obtuse. The truth is that these commodities which Nigeria can easily produce have been priced out of the reach of most Nigerian families with majority of our people resorting to tree felling and charcoal for their energy needs.
“Finally, we wish to warn that the bait by government to pay 40 million Nigerians N5000 as palliative to cushion the effect of astronomical increase in the price of petrol is comical, to say the least. The total amount involved in this queer initiative is far more than the money government claims to spend currently on fuel subsidy. Apart from our concerns on the transparency of the disbursement given previous experiences with such schemes, we are wondering if government is not trying to rob Nigerians to pay Nigerians? Why pay me N5000 and then subject me to perpetual suffering?
“Clearly, government thoughts on the so-called removal of fuel subsidy is cloudy and appears to be a “penny wise-pound foolish” gamble. It is clear that the palliative offered by government will not cure the cancer that will befall the mass of our people who suffer the double jeopardy of hype-inflation while their salaries remain fixed”
He implored the federal government to insulate the domestic consumers from the market pressure brought about by the free fall of the Naira by making arrangement with contiguous refineries not far from Nigeria to swap crude oil with refined petroleum products;
He also emphasized the need to accelerate work on the rehabilitation of Nigeria’s four major refineries which are all currently operating at near zero installed capacity; and
He urged the federal government to establish empirical data on the quantity of refined petroleum products consumed daily by Nigerians.
He added:” It is unfortunate that this record remains a myth and a huge crater for all manner of official sleaze and leakages in the downstream petroleum sub-sector of Nigeria’s oil and gas industry”
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