Subsidy removal: Nationwide shutdown looms as price hike projection besets Nigerians
…We have no plan to increase pump price- NNPCL
…Labour resumes threats of indefinite strike, rakes for shutdown
…As crisis rocks downstream oil sector over forex instability
Instability in pump prices of Premium Motor Spirit (PMS), popularly called petrol, associated with the removal of subsidy and foreign exchange (Forex) fluctuation, has further plunged the oil downstream subsector into crisis, just as projection of intending hike in pump prices has set more worries before Nigerians.
Nigerians have become more agitated following projections of further hike in pump price of petrol, as the Organised Labour has again vowed to proceed at this time with a total, comprehensive and indefinite nationwide shutdown of the Country, should there be another increase in petrol pump price from the subsisting N617.
The Nigeria Labour Congress (NLC), on Monday, describing the subsisting N617 official price set by the Nigerian National Petroleum Company Limited (NNPCL) as “illegal,” further raised alarm of tougher resistance as indications of further hike in pump price became more looming.
NLC President, Joe Ajaero, gave the warning on Monday, at the African Trade Union alliance meeting in Abuja, where Organised Labour also warned against undermining the demands of the union.
Recall the Organised Labour had earlier suspended a proposed indefinite strike on Thursday, August 4, 2023, following a meeting with President Bola Tinubu.
The Federal Government following the development withdrew a contempt suit filed against leaders of the Organised Labour for organising the natiowide protest, citing defiance to a subsisting order of the National Industrial Court.
Oil marketers have indicated that the cost of petrol would rise to between N680/litre and N720/litre in the coming weeks should the dollar continue to trade from N910 to N950 at the parallel market.
Recent developments relating to foreign exchange have further plunged the downstream oil subsector into instability.
Weekend, foreign exchange hit a higher blow of crossing the N900/dollar ceiling, up to over N945/dollar at the parallel market, a development marketers noted has hit hard on dealers with uncertainties forcing them to shun importation due to scarcity of foreign exchange to import the commodity.
It was gathered independent importation had ceased as marketers struggle to recoup investment due to the fall of the Naira.
Oil dealers have said the CBN Importers and Exporters (I&E) official window for foreign exchange, which boasts of a lower exchange rate of about $740/litre, had remained illiquid and unable to provide the $25m to $30m required for the importation of PMS by dealers.
The marketers have noted that about $25m to $30m needed to import petrol cannot be sourced in the I&E window, a development discouraging marketers from importation.
The CBN last week attributed the continued fall of the Naira against the dollar to the diversion of Diaspora remittances to the parallel market.
It was gathered oil marketers still depend on sourcing dollars from the parallel market, as the CBN’s I&E official window was illiquid.
The development, oil dealers have said would further inform jerking in pump price of petrol, while scarcity of the commodity looms, following the uncertainties which have made dealers sceptical of importing.
Oil marketers have noted that since subsidy has been discontinued, Nigerians should expect more vagaries in the pump prices of petrol, as petroleum products prices would now fluctuate with the exchange value of Naira to the dollar, even as they projected Nigerians risk to pay N750/litre should the value of Naira further devalue to exchange for N1000/$1
It is expected that other marketers would follow suit should the NNPCL which is still the major importer of petrol fix a new pump price any moment.
It has been gathered dealers were not importing petrol despite the licences issued by the government recently to about six marketers to bring in products.
Oil marketers have noted that the landing cost of petrol has risen month-on-month, MoM, by 37.4 per cent to N632.17 per litre in July 2023, from N460 per litre in June 20, just as the landing cost for August is expected to rise further.
Another increase in pump price would record the third within 10 weeks.
The projection has angered the Organised Labour which threatened a full blown shutdown of the Country should such increase take place.
The Federal Government had in addition to negotiation explored other means, including legal actions, in attempt to foreclose Labour’s resort to protests against subsidy removal and the associated hike in prices of commodities.
Recall the Federal Government had earlier this month filed a contempt proceeding against leaders of the NLC and the Trade Union Congress (TUC) for allegedly embarking on an industrial action contrary to a June 5, 2023, exparte order by the National Industrial Court, (NIC).
Nigerian NewsDirect had reported that the Federal Government may not leave out the option of court instrument in its attempt to forestall a nationwide protest by the Organised Labour.
The contempt suit by the Federal Government was brought to notification in a “notice of consequences of disobedience to order of court” filed before NIC in Abuja, which was addressed to NLC President, Joe Ajaero; Deputy Presidents, Audu Aruba, Prince Adeyanju Adewale and Kabiru Sani; General Secretary, Emmanuel Ugboaja; TUC President, Engr Festus Usifo; Scribe/Chief Executive, Nuhu Toro.
The contempt notice signed by Senior Registrar, Balogun Olajide, had read, “Take notice that unless you obey the directions contained in the order of the National Industrial Court, Abuja, delivered by Honourable Justice Y. Anuwe on June 5, 2023, as per the attached enrolled order, you will be guilty of contempt of court and will be liable to be committed to Prison.”
The FG also attached a copy of the exparte order made by Justice Anuwe on June 5, 2023, to the notice of contempt proceeding forwarded to the NLC and TUC officials.
The order had read in part: “Having therefore considered the totality of this application, I make the following orders: The defendants/Respondents are hereby restrained from embarking on the planned Industrial Action/or strike of any nature pending the hearing and determination of the Motion on Notice dated June 5, 2023.
“It is ordered that the defendant/Respondents be immediately served with the originating processes in this suit, the Motion on Notice and the order of this court hereby made.
“The Motion on Notice is hereby fixed for hearing for June 19, 2023. The Hearing Notices to that effect shall be served on the defendants/Respondent along with the other processes.”
Recall that the Federal Government had at the onset approached the court to secure an injunction to foreclose Labour’s initial plans to embark on strike in June at the early stage of the announcement of President Tinubu to end petrol subsidy.
Although the Federal Government had last week withdrawn the contempt suit, it may file another should talks to negotiate with Labour fail in the case of another hike in pump price of petrol.
We have no plan to increase pump price- NNPCL
In a related development, the Nigeria National Petroleum Company Limited (NNPCL) has stated that it has no plans to increase the price of Petrol across its service stations.
In a post on social media, the NNPCL said, “Dear esteemed customers, we at NNPC Retail value your patronage, and we do not have the intention to increase our PMS pump prices as widely speculated. Please buy the best quality products at the most affordable prices at our NNPC Retail Stations nationwide”
