Why Nigerians, Labour may resist fuel price increase



Monday, January 15, 2018

Nigerians, especially members of the Civil Society Organisations (CSOs), the labour centre, including the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG), may soon be on a collision course with the Federal Government over subtle moves to alter the pricing template of Premium Motor Spirit (PMS) popularly called petrol.

Though, the Federal government has yet to make any public declaration about possible increase in  petrol price,  but analysts have attributed the persistent fuel scarcity across the country to clandestine moves by the government to hike the price of fuel.

Firing the first salvo, which signaled government’s intention in that regard, was the recent declaration by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Maikanti Baru, that the landing cost of petrol was now N171 as against the approved retail price of N145.Baru claim was later corroborated by the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu.

The disclosure by Baru has continued to generate mixed reactions from stakeholders, warning that any attempt by Government to increase petrol price will be met with stiff opposition as Nigerians were yet to benefit from the promises made by the Federal Government when it increased petrol price from N86.50k to N145 in 2016.

More troubling for the economy is the claim that over N20 billion has so far allegedly being expended on subsidies.

NNPC alert Nigerians

On December 25, 2017, the NNPC disclosed that the landing cost of petrol is N171 per litre, meaning that at N145 per litre, the Federal Government is currently paying a subsidy of N26 on a litre of the commodity.

 Baru, while briefing journalists in Abuja, explained that Cost, Insurance and Freight price of petrol was $620 per metric tonne, adding that at N305 to a dollar, the landing cost translates to N171 per litre.

He, however, disclosed that despite the higher landing cost, there is no plan to increase the price of the commodity, adding that the N145 per litre price was guaranteed.

He also noted that despite the actual landing cost, marketers are being supplied the product at N133.28, giving them ample opportunity to make a profit.

FG proposes two pricing models

But, despite the assurance  from the Federal Government that it has no plan to increase petrol price, the outburst of  Kachikwu during an investigate hearing organized by the senate on the lingering fuel scarcity suggests otherwise.

At the hearing, Kachikwu had proposed two petrol prices among other recommendations in a bid to arrest the persistent fuel crisis.

“We are also looking at the potential of – going theoretically to respect the N145 pump price – having a plural pricing system. The NNPC and all its stations, about 400 across the country, will sell at N145. At the same time, marketers are able to import the product at their own cost and sell. It will now be for the individual to stay with NNPC or not. It does not affect the Federal Government on what the NNPC is selling.”

Listing the other options available to the government to maintain the current pump price, the minister stated that one of the mechanisms being considered was to work with the Central Bank of Nigeria to create a forex policy for marketers to be able to sell at N145.

The minister pointed out that unless the pricing problem was resolved, the issues would remain persistent.

Labour, stakeholders kick

While the Federal Government has yet to  fulfill its promise to cushion the effect of the last fuel price increase in May 2016 through a N500 billion social welfare scheme, stakeholders are worried that an attempt to increase fuel price at this period will mean taking Nigerians for a ride.

Some of the intervention and palliatives in the N500 billion social welfare included; N5,000 monthly payment to one million extremely poor Nigerians for 12 months, N60,000 direct provisions of very soft loan-cash for 1.76 million Nigerians, 5.5 million Nigerian children starting with 18 states- three per geopolitical zone to be fed for 200 days.

President,   Academic Staff Union of Universities (ASSU), Professor Abiodun Ogunyemi,  has vowed to mobilise other progressives in the country to resist any attempt to further increase the pump price of petrol by the Federal government.

He said that it would be uncanny for the government to contemplate hiking the fuel price when Nigerians are suffering unbearably.

ASUU, however, said government has no justification to further increase the price of fuel, insisting that Nigerians were already being overtaxed.

President of NUPENG, Mr. Igwe Achese, warned against any increase in fuel pump price, saying that Labour would react appropriately should the Federal Government increase price.

 Achese, said  that the union does not believe in fuel price increase, hence, it would never support it.

However, the NUPENG President said any plan to increase fuel price in any or through any means would not be supported; adding that he would not even want to talk about fuel price increase.

“I don’t believe in any increase and I don’t want to talk about it. Should there be any, we will react appropriately,” he warned.

For his part, President of Nigeria Labour Congress (NLC), Mr. Ayiba Wabba, said the pump price of N145 per litre is sacrosanct; adding that in their meeting with the Federal Government and other stakeholders , the issue of price increase was never on the table or in the agenda.

The NLC President said President Muhammadu Buhari, had indicated, as revealed during the meeting held at the Presidential Villa that the issue of price increase should not be contemplated.

Wabba maintained that the issue on the table is how to make product available at the current price, sustained and monitor distribution.

“It (price increase) was not actually on the table. The only thing on the table, which we are presently discussing is how to make product available at the price of N145 per liter. Nobody has the mandate to discuss the issue of price. The price at N145 is sacrosanct, all we discussed at the meeting is how to make product available,’’.

The Chairman, All Farmers Association of Nigeria (AFAN), Lagos State Chapter,  Otunba Femi Oke, said it remained worrisome that over one year since they made presentation to the Lagos State Government through the Ministry of Agriculture and Cooperatives,  on the school fedding progamme,nothing has been heard.

Oke said his association with about two million members in partnership with some foreign investors from Atlanta Georgia in the United States packaged a robust and comprehensive action plan towards the implementation of the Free Homegrown School Feeding Programme.

Also speaking,  the Deputy Executive Director, Socio- Economic Right and  Accountability Project  (SERAP) Mr. Timothy Adewale, took a swipe at the Federal Government, saying it is not enough for Government to make bogus promises, when such cannot impact on the lives of Nigerians. He said the natural resources of any country should be for common good of the masses and not for the benefit of a selected few, saying Government cannot afford to take Nigerians for granted.

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