The Nigeria Labour Congress on Saturday said it was looking forward to holding a meeting with the incoming administration of the President-elect, Bola Tinubu, over matters relating to the removal of subsidy on Premium Motor Spirit, popularly called petrol.
It, however, insisted that its position on fuel subsidy had not changed, stressing that the government must endeavour to get Nigeria’s refineries functional before taking out subsidy on petrol.
The labour union’s position was also re-echoed by the Independent Petroleum Marketers Association of Nigeria, as IPMAN explained that while it was important to halt the subsidy regime, the government should at the same time strive to fix Nigeria’s refineries in Kaduna, Port Harcourt and Warri.
The NLC Vice President, Nigeria Labour Congress, Adewale Adeyanju, told our correspondent that though the NLC had already made its position known to the incoming administration, it was looking forward to meeting the President-elect after he has been sworn in as President.
“The man (President-elect) has not been sworn in. When he is sworn in, he can then sit down with the NLC to discuss the fuel subsidy issue. The NLC has been making its position known to Nigerians and to even the incoming government.
“The incoming government has been advised properly by all stakeholders about removing the subsidy and I cannot advise them more on this. But let them come in first and we can then sit with them and discuss this matter,” Adeyanju stated.
On what the position of the NLC was, he explained that it had remained that the government should get Nigeria’s refineries running, as this would help ameliorate the cost burden of fully deregulated petrol.
About two weeks ago, The PUNCH exclusively reported that Nigerians should brace up to pay N8.4tn for petrol from July to December 2023, once the Federal Government stops subsidy on PMS in June, as planned.
This was following the explanation by oil marketers that the average cost of petrol could rise to about N700/litre from July, should fuel subsidy be brought to an end in June as projected by the Federal Government.
“If the refineries are not working and we are going to depend on imports, then the price of petrol may rise even above the N700 or N750 that is being projected,” the President, Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, had told our correspondent.
He added, “This is because it is going to depend on the dollar rate and crude oil cost. When you check the landing cost, logistics, overhead, profit, etc, you may be looking at about N800, though the average is pegged at N700.
“And that is if we continue to depend on imports. Now, this calculation is based on when we get the product at the approved Central Bank of Nigeria dollar rate, and not at the over N740/$ black market price.
“If the dollar is accessed at the black market rate, then you can double that N700/litre average price once the subsidy is removed. So you should be looking at between N1,400 to N1,700/litre. This is why we must get our refineries working.”
Gillis-Harry’s position was further given credence by the Secretary, IPMAN, Abuja-Suleja, Mohammed Shuaibu, who explained, as captured in the exclusive report that though it was vital to halt the subsidy regime, implementing this without functional refineries would definitely lead to high PMS price.
‘Fix refineries first’
Also speaking on the issue, the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, said IPMAN had repeatedly made it clear that subsidy should be removed when refineries are working.
“We have said this time without number that though subsidy removal is okay, it should be done when the government has fixed our refineries. This will help cushion the hardship which the full deregulation of petrol would have on the masses,” he told our correspondent.
Ukadike had earlier explained that IPMAN was not saying that subsidy should not be removed.
MOMAN objects
But the Executive Secretary, Major Oil Marketers Association of Nigeria, Clement Isong, gave a different view on the subsidy debate, as he insisted that it was high time the government stopped subsidising petrol.
Asked to state what could be the cost of petrol when deregulated, he replied, “It is not safe to project the cost of petrol at the pumps because it is all based on how we manage our foreign exchange as a country. But that does not mean we should continue to burn trillions of naira on subsidy. It makes no sense.
He said, “If there is visibility, if you stop your multiple exchange rates, if everybody develops confidence in the credibility, sincerity, transparency in the management of the nation’s foreign exchange, then your pump price can indeed, even if it stands at N400 or above N400, go lower. But this is if the cost of crude, cost of Platts continues to trade lower in the international market.”
