The federal government and the Organised Labour failed to reach a consensus on the contentious issue of fuel subsidy removal yesterday.
The meeting, which was aimed at addressing the concerns of Nigerian workers regarding the impact of the subsidy removal, ended in a deadlock last night at the Presidential Villa, Abuja.
The decision to remove the fuel subsidy had triggered immediate hoarding by marketers and panic buying by consumers, causing a hike in pump prices from about N194 a litre to N600 a per litre in some states. The organised labour, led by the president of the Nigeria Labour Congress (NLC), Comrade Joe Ajaero, and president of the Trade Union Congress (TUC), Comrade Festus Osifo, criticised the government’s approach, highlighting the lack of engagement in exploring alternative solutions.
After the lengthy meeting, Comrade Ajaero expressed the Labour’s demand for the government to return to the status quo. He stated, “We should go back to the status quo, negotiate, consider alternatives, and assess the effects this action will have on the people if it is implemented.” Ajaero further pointed out that the subsidy provision had been made until the end of June, questioning why the government was deviating from the law that had already set the expenditure limit.
Responding to the government’s claim of insufficient funds to continue the subsidy, Ajaero challenged the purpose of governance. He asked, “Is it the duty of NLC to raise funds for the government? Is it our responsibility to collect taxes or sell crude on the international market when the price is high, while the government, a major importer, claims there is no money?”
When asked about the practicality of continuing with subsidy payments, Ajaero redirected the focus, saying, “Why do you keep hammering on subsidy? Do you understand its meaning? Has anyone explained what subsidy is? “Are there any countries, even in the US, that do not subsidise the cost of living, even if it is through public transportation? These are the issues we are considering.” On his part, the president of the TUC, Comrade Osifo, said that the unions would consult with their members before deciding on the next meeting with the government.
Speaking for the government, one of President Tinubu’s aides, Dele Alake, described the meeting as a robust engagement, even as emphasised the shared goal of progress and stability for Nigeria. Alake stated, “Talks are ongoing, and it’s better for all sides to keep discussing to reach an amicable resolution that benefits all Nigerians in the long run.”
The government’s team included Head of Service of the Federation, Folashade Yemi-Esan; group chief executive officer of the Nigerian National Petroleum Company (NNPCL), Mele Kyari; permanent secretary of the State House, Tijjani Umar; former governor of Edo State and former President of the NLC, Adams Oshiomhole; permanent secretary of the Ministry of Labour and Employment, Kachallon Daju, and governor of the Central Bank of Nigeria (CBN), Godwin Emefiele.
With fuel pump price hovering between N488 to N600 per litre following the removal of subsidy on petrol, economic and finance experts have called on the federal government to introduce palliatives that will cushion the harsh effects of the fuel price increase on Nigerians.
The Nigerian National Petroleum Company NNPC Limited (NNPCL) has confirmed the increase in the pump price of premium motor spirit (PMS), popularly known as petrol, at its retail outlets across the country. According to the released price list, the new pump price of PMS ranges from N488 in Lagos State to N557 per litre in Yobe and Borno states, while it is N537 in Abuja.
Following President Bola Tinubu’s announcement of fuel subsidy removal on Monday during his inaugural speech, the NNPCL yesterday morning released a list of adjusted pump prices for its mega stations across the 36 states of the federation and the Federal Capital Territory, Abuja.
The national oil firm, in a statement signed by its chief corporate communications officer, Garba Deen Muhammad, said the price adjustments are in line with current realities. LEADERSHIP had earlier yesterday reported increases in petrol pump price to N537per litre in Abuja while Lagos and Port Harcourt had pump prices of N488 and N511 per litre respectively.
The statement reads as follows: “The NNPC Limited wishes to inform our esteemed customers that we have adjusted our pump prices of PMS across our retail outlets, in line with current market realities.” “As we strive to provide you with the quality service for which we are known, it is pertinent to note that prices will continue to fluctuate to reflect market dynamics.” It gave assurance that NNPC Limited was committed to ensuring a ceaseless supply of products and that it regretted any inconvenience the development may cause the citizenry.
The experts who spoke to LEADERSHIP yesterday noted that though the action will inflict pain on the lives of Nigerians, especially as the cost of living is expected to rise, they believe the removal seems the sane option to rescue the economy in the wake of mounting national debt and revenue losses due to the subsidy.
The chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the impact of the subsidy removal is currently visible in the price increment of fuel and transportation, adding that this is a short term impact which is expected.
He said, “The government now needs to move to the phrase of palliatives. Yes, we should not go back on this, but we should now do something about palliative measures that will bring down the cost of living generally, cost of food, cost of transportation, and import duty on vehicles and import duty on renewable energy.”
He urged the government to quicken the availability of electricity supply so that when people do not have reason to fall back on the use of generators, the demand for fuel will be less. “These are things the government needs to quickly do to mitigate this current situation and I can say that this current situation are likely to be temporary,” he said.
On his expectation in the next few weeks, he said: “We expect that fuel price will go up and transportation fare will go up. This hike in prices will not last for long. The prices of fuel may not go to pre-subsidy level but it is not going to remain as high as it is now, because right now there is a shortfall on the supply side and panic buying.
“Within the next few weeks, we will be getting close to an equilibrium price, and the price of fuel may likely be much less than what we are experiencing now. At equilibrium, there will be much competition and supply in the market and this will have a moderating effect on fuel prices.” On his part, the Head of financial institutions ratings at Agusto&Co, Ayokunle Olubunmi, whilst noting that the removal is something the country needs at the moment, said its impact on citizens will be drastic.
According to him, the full removal will push inflation, which is already at a high level, to further rise to above 40 per cent. Inflation currently stands at 22.22 per cent as of April 2023, the highest level since September 2005 when it was 24.31 per cent.
“In a country where you are already having inflation of 22 percent, and you want to move fuel price from roughly N200 per litre to something between N600 to N700 per litre, inflation will jump as high as even 40 percent, but it will come down eventually.
“I believe that full removal of subsidies is going to be counterproductive. I would rather prefer the idea of increasing it gradually so people can easily get used to it; it can be moved to like N250 and gradually remove the subsidy before December,” he said.
Meanwhile, road transport workers have called on the leadership of Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) to intervene so that Nigerians will not be exploited by oil marketers and filling stations which are selling old, subsidised stock at new fuel pump prices.
Speaking with LEADERSHIP during a match and rally organised by the road transport union yesterday in Lagos, the members of labour union said the best thing NLC and TUC should do now is to storm all filling stations which, though had old stock which had been subsidised till June, jacked up the price nevertheless. Comrade Idris Idris wondered why umbrella unions, the TUC and NLC, would allow Nigerians to be exploited by oil marketers and filling stations whereas they are selling old stock.
Similarly, Mrs Ajoke Shina blamed the development on President Tinubu’s hasty pronouncement over what ordinarily should elapse by June. “If not for mischievousness, why should Buhari push the removal of subsidy, which he did not do in seven years, to the new regime within a few days of leaving office; and Tinubu played into a set trap meant to create problems between Tinubu and the masses at the beginning of his regime. Tinubu also shouldn’t have used such a statement as a welcome address to the nation.
“But labour unions should embark on the picketing of all filling stations to force them to bring down the price since they are still enjoying the subsidised products. Already, all filling stations have jacked up the price; NNPC at Ojodu openly showed price as N488 per litre while some are selling at N500 in other stations,” she pointed out.
NLC Rejects New Pricing Template, Meeting With President Ends In Deadlock
Earlier, NLC had warned the federal government against toying with patience of Nigerian masses with subsidy removal. NLC president, Comrade Joe Ajaero, who expressed the displeasure of Nigerian workers over the removal, said: “NLC is outraged by the pronouncement of President Bola Tinubu removing fuel subsidy without due consultations with critical stakeholders or without putting in place palliative measures to cushion the harsh effects of the subsidy removal.
“Within hours of his pronouncement, the nation went into a tailspin due to a combination of service shutdowns and product price hike, in some places representing over 300 per cent price adjustment. By his insensitive decision, President Tinubu on his inauguration day brought tears and sorrow to millions of Nigerians instead of hope. He equally devalued the quality of their lives by over 300 per cent and counting.” He, on behalf of the union, demanded immediate withdrawal of the policy because the implications of the decision are grave for the security and well-being of workers.
We’re In Dire Moment, APC Chairman, Adamu, Laments
Also yesterday, the national chairman of the All Progressives Congress (APC), Senator Abdullahi Adamu told the governors at the party’s National Working Committee (NWC) meeting in Abuja that the country is in a very difficult moment now that fuel subsidy has been removed. Adamu said it was coming at a very difficult period.
The governors in attendance include Hope Uzodinma (Imo), Mai-Mala Buni (Yobe), Yahaya Bello (Kogi), Abduallahi Sule (Nasarawa) Mohammed Bago (Niger), Uba Sani (Kaduna), Inuwa Yahaya (Gombe), Nasir Idris (Kebbi) and Dapo Abiodum (Ogun). The APC chairman urged the governors to adhere to the APC manifesto in the execution of their mandate and address the challenges of their respective states head-on even in the present circumstance.
“You, as the chief executive officers of the states, must key into this manifesto but there are peculiarities; there are priorities you must have set and you are bound to do as much as you can to meet the expectations of those who voted for us.
“We are in a very difficult moment and you have come at a very difficult period. Even with the timing of the lifting of the fuel subsidy, this is going to be very specially challenging to us, particularly to you because you are where it matters most.
“From national politics, you are the shock absorbers in the various states of the federation. You live with the people. You wake up with the people and you work with them. The expectation is that you could have a better appreciation of their pains as citizens of this country. So, a lot of expectations will be on you as governors of the federating units of this great country.”
He told them that the party would give them the support and cooperation they need. “If you have any problem, turn to us and we will give you the best advice we can. But whatever we do with you, you are the one wearing the shoes and know where it pinches,” he said.
He thanked the governors who attended the meeting even at the very short notice, adding that another meeting would be summoned soon when all of them will attend to put issues of governance in proper perspective with the federal government.
In the meantime, LEADERSHIP Correspondents who visited filling stations with Lagos and neighbouring Ogun State yesterday reported that fuel pump prices hover between N488 and N600. NNPC retail outlet at Falomo, Ikoyi area of Lagos sold PMS at the rate of N480 earlier yesterday as the long queue stretched towards Falomo Bridge.
However, it adjusted the price to N488 in the afternoon even at filling stations on Ahmadu Bello Way, Victoria Island. MRS sold at N490 per litre, Mobil filling station sold at N488 per litre, Oando in Marina sold at N490 while former Oando, now NNPC, Marina, was selling at N488.
Meanwhile, motorists have lamented over the instantaneous hike of the price of petrol by filling stations and oil marketers as ludicrous. This is even as some of the cars on queues across filling stations left in anger without purchasing fuel when they learnt of the price hike.
Expressing his dissatisfaction, one Mr. Boniface said: “This is so sudden and there is nothing that warrants this. Nigerians have no adequate way in place to cushion this act by the filling stations.”
He, however, opined that this sole act had put so many Nigerians into poverty, as this should have been in the phases, so that Nigerians will know how to ameliorate this as a monthly notification would be better for all involved.
A car driver, Andrew Onoja, said he canceled the order he received because there was no fuel. “On Tuesday, I queued at MRS station from 9am to 6pm just to get fuel. This is not funny at all. I believe the timing is wrong and has created panic buying. It should have been a gradual thing. The government should have informed the citizens and also carried the marketers along.”
An e-hailing cab company had earlier announced that the fuel situation had reduced the operation of its company to about 60 percent. “We have carried out a major cancellation because our pilots were unable to get fuel to transport those who had booked their services back to their destinations. Aside from the scarcity, the increase in the fuel price has also affected our partners, who provide us with the vehicles,” he said.