On Wednesday,the strike and protest called by the Nigeria Labour Congress, NLC,was monitored by Daily Post in Abuja.The aim which is to remonstrate Federal Government’s increment of the price of petrol to N145 per litre. The protesting unionists were seen at the popular Berger Junction .Their statement read thus
- The Federal Government through the Minister of state and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Dr. Ibe Kachikwu, Wednesday last week withdrew PETROL or premium motor spirit (PMS) subsidy, raising the price from N86 to N145 per litre, an increment of over 67 percent.
This neo-liberal policy of government is unacceptable and contrary to President Muhammadu Buhari’s earlier declaration mid-2015 after the people’s mandate when he said: “I have received many literatures on the need to remove subsidies, but much of it has no depth.” He said that lack of security, sabotage, corruption and mismanagement, not necessarily subsidies, were the most serious problems of Nigeria’s oil sector. Organised Labour believes that the President’s approach smirks cluelessness and incompetence tackling identified problems. Nigerians say No to ineptitude.
The President’s posturing that “when you touch the price of petroleum products, that has the effects of triggering price hike in transportation, food and rents. That is for those who earn salaries, but there are many who are jobless and would be affected by it.” From our survey since the subsidy withdrawal, prices of goods and services increased by between 80 and 100 percent.
Traumatized Nigerian masses must not swallow this poisonous economic pills.
- In late December 2015, the Minister of State told Nigerians that he spent N1 trillion on subsidies. On the 18th of January, he again allayed the fears of Nigerians that through his ingenuity, he was saving $1 billion and reduced the pump price of PMS from N87 to N86 (N86.50 with independent markers). The same Kachikwu last week said with N86.50 pump price of PMS, he was paying a subsidy of N13.7 per litre in the second quarter of 2016 which he claimed translated to N16.4 billion monthly so had completely removed subsidy and worked with the price modulation.
The Minister of State who is disorganized with conflicting policy statements told Nigerians that he has no resources for product supply needs of Nigerians, no foreign exchange and cannot open letter of credit to import products.
The Minister of State said the situation imposed a 90 percent products supply on NNPC in 2015, far and above its supply strength of 48 percent. Be reminded that the NNPC law of 1st of April 1977 which President Buhari (now the Minister of Petroleum Resources) who was then Minister of Petroleum was for refining, treating, processing and generally engaging in the handling of petroleum for the manufacture and production of petroleum products and its derivatives. NNPC was not established to import refined products that one year in office; products import and subsidy are the issues.
Mr. President and the Minister of State are reminded that there are potentials for up to 6000 investment opportunities when we refine a barrel of crude. Our petroleum refineries have been condemned to national relics for keepsake. Refineries are strategic national assets for energy, technology, security, skills, investment, increased GDP, employment, and government revenue which Nigerians earnestly desire. Investments in refineries and petrochemicals are safety nets technological and socio-economic developments.
Crude oil exports are now investing massively in the downstream sector. All Gulf Cooperation council (GCC) and Middle East North Africa (MENA) countries are investing in the downstream sector. Saudi Arabia, the giant in OPEC and the Middle East, and better known for its upstream activity, now has an ambitious target in the downstream expanding market share in Asia, Europe and America.
Saudi Aramco the world’s biggest oil company our own equivalent of the NNPC has a refining capacity of 4.5 million barrels per day, making it one of the top world refiners. It is to increase its refining capacity by 2025 to 10 million barrels per day. It would make Saudi Aramco the world’s largest refiner ahead of ExxonMobil. Where is Nigeria? An import and subsidy generalissimo!
Nigeria is the only OPEC country that imports refined petroleum products. Nigeria was recently subjected to super majors foreign exchange bail out of $200 million for products from their refineries overseas.
The Federal Government succumbed to external pressures when it has the natural resources and human capital to multiply the economic fortunes of Nigerians. Nigeria has been held hostage: Nigeria should have refining capacity for exports to accumulate fiscal reserve. Nigeria has no refining capacity for petroleum products.
Nigerians must not swallow the bitter pills of the IMF proponents of subsidy removal, currency devaluation and value added tax (VAT) increments. The IMF told our leaders: “Lower oil prices provide an opportunity to phase out fuel subsidies. The recent drop in crude oil prices (and lower petrol and kerosene prices) could facilitate the completion of the subsidy reform which started in 2012.
The World Bank in December 2015, said that scrapping the subsidy now would not push the pump price of petrol above N100 per litre. They advised that removing the subsidy immediately would be Nigeria’s best due to the low price of crude oil. That is where we are today.
14.The IMF report of June 2015 indicates that the world governments provide subsidies to the highly profitable industry to the tune of $5.3 trillion per year. Is subsidy good? Yes! Subsidies make access to energy and transport affordable. Subsidy anywhere is a cushion to enhance the welfare and wellbeing of the people. Nigerians have no public good. Labour is saying NO to subsidy removal.
- The posture of Labour is proffering solutions with ideas to jumpstart the economy using petroleum refining as a fulcrum. Investing in the downstream sector is the way this government should go rather than investing in desperate calumny campaigns against Organised Labour that is encouraging it to fulfill all its electioneering campaign promises.
16.The national oil company has been reduced to a marketing company importing and distributing petroleum products. Problems have compelled countries to challenge their citizens to actions. Our thinking caps are urgently needed in this period of low crude oil prices. We have gone this whole hug of subsidy for about two decades rather than confronting the problem of corruption, inefficiency and technical incompetence which are indeed ours to solve.
- Other countries are utilizing their petroleum to the greatest use for their greatest number. We run away like water that will always follow the line of weak resistance. Rehabilitating, upgrading existing refineries and building new ones is the solution rather than dissipating energies on price differentials of petroleum products imported from Europe.
18.Nigerians represented by the Organized Labour, NLC and TUC therefore demand the following from the Federal Government:
Restoration of the pump price of PMS at N86 per litre; Reversal of the 45 percent electricity tariff increase in February 2016 and provision of pre-paid meters and stop estimated billings; Rehabilitation of our refineries in Port Harcourt (1& 2), Warri and Port Harcourt and upgrading;
Construction of new refineries using recovered oil loot; Investigation of the activities of the NNPC with corrupt officials including those involved in subsidy scams brought to justice; Reconstitution of the Boards of the NNPC and PPPRA.