Talks between the Federal Government and organised labour over the removal of fuel subsidy ended in a deadlock on Wednesday as they failed to reach a consensus following the hike in petrol pump prices to over N700 from N195 per litre by oil marketers.
The hours-long meeting which was held at the Presidential Villa was to, among other things, prevent a labour crisis following the recent increase in the petrol pump price occasioned by the discontinuance of petroleum subsidy.
Earlier on Wednesday, the Nigerian National Petroleum Corporation Limited said it had adjusted the pump price of Premium Motor Spirit to reflect the market realities. The agency, however, failed to state the new prices of petrol.
However, several retails outlets sold the product between 600 and N800 in Lagos, Abuja , Ogun and some other states.
The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, pointed out that the hike in the cost of PMS would trigger galloping inflation in the country, stressing that some outlets in the South-East were currently dispensing the product at N1,200/l.
Ukadike stated, “Once NNPCL retail stations have adjusted their pumps to reflect the new price, there is nothing you can do about it; that is the new price. As I speak with you, all of them are now selling at the new prices. The situation is so bad, that somewhere in Ebonyi State our members informed us that it is now N1,200/litre.
“We thought the President would remove the subsidy through a seamless means because the source of this petrol is the NNPCL. They are the ones subsidising petroleum products, they are the people who use their revenue to subsidise this product.’’
The IPMAN spokesperson expressed worry over the rate of increase in inflation and hardship that would come as a result of the latest hike in petrol price.
This hike in petrol price will definitely lead to galloping inflation and will worsen the hardship already being faced by the Nigerian masses. It is not something to cheer about. It came as a surprise and in the coming days, we will see the very harsh ripple effects,” he stated.
Meanwhile, Ukadike has called on the Federal Government and the NNPCL to give other marketers the opportunity to start importing petrol in order to create competition in the sector.
The NNPCL is importing and has not given people the opportunity to join them in importing so as to see whether private sector operators can import the product cheaper or not. So there is no competition. In a deregulated regime, there must be competition, everyone with capacity should be allowed to import,” the IPMAN official stated.
When asked whether other marketers could resume imports since the government had finally deregulated petrol prices, Ukadike replied, “Marketers can import, but let me tell you some of the factors militating against this. The first is that there won’t be availability of dollars.
“You will source your dollar from the parallel market and if you are not careful in doing this, and you go into the importation of petroleum products, you might not ‘come out of it alive’ at the end of the day.
“So what we are saying is that those advantages that NNPCL has, should be shared with other major importers of petroleum products. If it is through crude buy-back, they should let us know so that independent players such as IPMAN members can come together and be able to use it in the buy-back model.’’
He added, “For independent marketers, the most important thing is that there should be availability of petroleum products, and the government should open up the space for importers and investors to come in.”
NNPCL, the sole importer of petrol into Nigeria for several years running, confirmed the hike in petrol price in a statement and a new pricing template released to marketers nationwide.
But the move has sparked a groundswell of anger across the nation with the Nigeria Labour Congress demanding an immediate reversal of the decision.
The union also said it would hold an emergency meeting on Friday on the fuel price increase which had triggered hoarding and scarcity across the country with attendant rise in transport fares, goods and services.
The fuel price hike by the oil firm is coming 72 hours after President Bola Tinubu declared in his inaugural address on Monday that the subsidy regime had ended.
To pacify the growing anger over the situation, the FG hastily summoned some labour leaders to a meeting at the Presidential Villa, Abuja, on Wednesday evening.
The meeting had in attendance the NLC President, Joe Ajaero and his Trade Union Congress counterpart, Festus Osifo, former NLC President and immediate past governor of Edo State, Adams Oshiomhole, Permanent Secretary, State House, Tijjani Umar, Head of Service of the Federation, Dr Folashade Yemi-Esan, Group Chief Executive Officer of the NNPCL, Mele Kyari, and others, however, ended in a deadlock as the labour and government teams failed to reach a consensus.
Speaking at the end of the meeting, Joe Ajaero, said “As far as labour is concerned, we didn’t have a consensus in this meeting.”
He faulted the NNPCL over an official release published hours earlier reviewing the petrol pump price in its filling stations nationwide.
He said the move puts the labour unions in a difficult position on the negational table.
That’s the principle of negotiation. You don’t put the partner, ask them to negotiate under gunpoint. The prayer of the NLC is that we go back to the status quo, negotiate, think of alternatives and all the effects and how to manage the effects this action is going to have on the people. If it is an action that must take off.
“The subsidy provision has been made up to the end of June. And before then, conscious people, labour management, and the government should be able to think of what will happen at the end of June. You don’t start it before the time,” Ajaero said.
‘Negotiation ongoing’
On his part, Dele Alake, who spoke on behalf of the Federal Government said the negotiations were ongoing and the parties will reconvene on a yet-to-be-defined date.
Earlier, NNPCL’s Chief Corporate Communications Officer, Garba-Deen Muhammad, said in a statement issued in Abuja, that the price hike was in line with market realities, stressing that the cost of petrol would continue to fluctuate with market dynamics.
This implies that the oil firm has deregulated the product, leaving its price to swing along with the dictates of the global petroleum products market.
“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. We assure you that NNPC Limited is committed to ensuring a ceaseless supply of products,” the oil company stated.
Before it issued its statement, a price list tagged, ‘Current NNPC Pump Price’ and ‘New pump price per May 31, 2023,’ indicated the latest cost of PMS in various states and the Federal Capital Territory.
Figures in the document indicated that while the cost of petrol in Borno State was put at N557/litre, the prices in Lagos, Abuja, Enugu and Ekiti were pegged at N488/l, N537/l, N520/l and N500/l, respectively.
The costs of the commodity at NNPCL stations for the other states were also contained in the document.
The President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, confirmed the document to be true which implied that the cost of petrol had been increased to over N500/litre in the states by the NNPCL.
Asked whether the document on the new pump price of petrol, purportedly issued by the NNPCL to oil marketers was true, Gillis-Harry replied, “Correct.”
NLC to meet
In response to the NNPCL’s action, the National Executive Council of the NLC has summoned an emergency meeting for Friday to discuss the situation and take a stand on behalf of Nigerian workers.
Speaking with one of our correspondents on Wednesday, the National Treasurer of the NLC, Hakeem Ambali said, “NLC had summoned an emergency meeting for Friday, June 2nd in Abuja to ratify labour position on this notwithstanding the parley with Federal Government.”
But a reliable source hinted that the NLC may issue an ultimatum to the government over the subsidy removal.
The source who spoke under anonymity said, “We will be meeting. An ultimatum will definitely be issued for the government to rescind its decision. But I will want the NLC president to confirm that to you.”
Reacting to the pump price adjustment, the Director-General of the Nigeria Employers’ Consultative Association, Mr Wale Oyerinde, observed that the situation had led to an astronomical increase in the prices of food.
Oyerinde said any increase in the pump price will lower the people’s real disposable income, adding that the economy will contract in terms of growth.
‘Increase badly managed’
The economist noted, “The increase, if not well managed, could lead to an increase in the prices of goods and services with consequential effects on the purchasing power of the already impoverished Nigerian.
‘’Already, the inflation rate in the country is high at 22.22 per cent as recorded in April 2023 and as such, any increase in the pump price of fuel will further accelerate inflation, which will distort and destabilize economic activities, shrink private sector business capital and lower the real disposable income of the people.
‘’No doubt, therefore, the economy would contract in terms of growth; business activities will face serious backlash; and aggregate consumption will fall due to inflationary pressure.”
He said there is a need for systematic and strategic removal of the subsidy to avoid impoverishing Nigerians further.
While it is desirable to remove the fuel subsidy, which in real terms is subsidizing inefficiency and corruption, it is important that the removal is systematically and strategically done in order not to impoverish further and worsen the already bad socio-economic indicators such as employment, poverty per capita income and many more,’’ he recommended.
Oyerinde said it was worrisome that prices of various commodities have skyrocketed a few hours after the President’s pronouncement on subsidy removal.
Consequently, it is critically important that the new government approaches the removal of the subsidy with caution to circumvent further degeneration in the economy,’’ he admonished.
The NECA DG advised on the need to step up the complete rehabilitation of the refineries to complement the newly commissioned Dangote Refinery.
On his part, the Deputy-President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa said that while the new pump price would cause hardship in the short term, the benefits of discontinuing the subsidy regime would be felt in the long term.
He said, “The consequences (of the new fuel price) were predictable. It’s just that we were not willing to confront them. It’s like having a monster in you that you’re not ready to confront until you decide that it’s time to fight the monster and get rid of it. There will be pain. It was known that there would be pain if we removed the subsidy. That pain will be there for a while. It depends on how much both parties do to reduce the period of severe pain.”
An economist, Mr Tajudeen Ibrahim, said, “It will have an inflationary impact on the economy. But in the medium to long term, the benefits to the economy are enormous because they will be investing the subsidy in projects that will drive economic activities and put Nigeria on a stronger footing in terms of economic growth, these are my expectations.”
On his part, the Deputy-President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa said that while the new pump price would cause hardship in the short term, the benefits of discontinuing the subsidy regime would be felt in the long term.
He said, “The consequences (of the new fuel price) were predictable. It’s just that we were not willing to confront them. It’s like having a monster in you that you’re not ready to confront until you decide that it’s time to fight the monster and get rid of it. There will be pain. It was known that there would be pain if we removed the subsidy. That pain will be there for a while. It depends on how much both parties do to reduce the period of severe pain.”
An economist, Mr Tajudeen Ibrahim, said, “It will have an inflationary impact on the economy. But in the medium to long term, the benefits to the economy are enormous because they will be investing the subsidy in projects that will drive economic activities and put Nigeria on a stronger footing in terms of economic growth, these are my expectations.”
Appraising the decision of the new government on subsidy removal, the People’s Democratic Party has said it is not surprised by the development because Tinubu during his electioneering campaigns promised to sustain the legacies of former president Muhammadu Buhari.
The opposition party asked Nigerians to brace up for more pains in the months ahead, stressing that it warned citizens of what awaited them should the All Progressives Congress win the 2023 presidential polls.
National Publicity Secretary of the party, Debo Ologunagba, however, urged Nigerians not to despair but to keep hope alive.
He said, “There is nothing to say anymore that we have not said. Bola Tinubu said he was going to continue with the policies of Muhammadu Buhari, which are policies of pain, anguish, sorrow, suffering, disregard for human lives and insensitivity. It is Biblical in that a man said ‘My father chastised you with a whip, I will chastise you with scorpions. Scorpions are more deadly than a whip.’
“Buhari has done his part and Tinubu has come to continue with the same agenda which is for personal aggrandizement. What are the legacies of Buhari? Insecurity, disunity, dislocation, poor living conditions and reduced life expectancy of Nigerians.
“We are hoping that Nigerians are still praying for an end to this. This is not about PDP or APC but about Nigerians. We warned about this and now, we are all feeling the heat. The new petrol pump price does not know APC or PDP.”
Ologunagba also took a swipe at the immediate former president for his role in mobilizing Nigerians against the planned, gradual phase-out of the subsidy regime when the PDP was in power.
