We have no intention of reversing subsidy removal — Tinubu tells Labour
…Describes Labour strike threat premature
…Promises to clean up existing inefficiencies within petroleum sector
By Moses Adeniyi
In response to projections of further hike in the price of Premium Motor Spirit (PMS), popularly called petrol, and threats by the Organised Labour to lead a natiowide shutdown in protest, President Bola Tinubu has said there is no going back on subsidy removal, promising his government would take measures to maintain the current pump price.
This is just as the President on Tuesday described as premature the threat by the Nigeria Labour Congress (NLC), to shut down the economy indefinitely over projected increase in pump price.
Tinubu, according to his Special Adviser on Media and Publicity, Ajuri Ngelale, who briefed State House correspondents at the Presidential Villa, Abuja, on Tuesday, said that there will be no increase in the price of PMS in any part of the country.
The media briefing took place after the presidential spokesman had met with his principal on the issue, following the threat by the NLC to go on strike without notice if the fuel price is increased again.
According to him, the official position is that there is no increase in prices at this time as “the president is convinced based on information before him that we can maintain current pricing without reversing our deregulation policy by swiftly cleaning up existing inefficiencies within the midstream and downstream Petroleum sector.”
He said it is incumbent on all stakeholders to hold their peace and endeavour to do due dillegence to assertain the true position.
According to him, the President is determined to maintain competitive tension within all sub sectors of the petroleum industry to ensure that no single individual or organisation dominates the sector.
He said the goverment will address the ineficiencies in the midstream and downstream petroleum value chains for price stability.
Ngelale who illustrated with a chart to prove that the cost of petrol is still much more cheaper in Nigeria than in other West African countries, stated: “This morning, I had the privilege of sitting down with His Excellency President Bola Tinubu as we discussed the current unfolding situation in the Country as it relates to fuel supply and demand.
“The President wishes first to state that it is incumbent upon all stakeholders in the country to hold their peace.
“We have heard very recently from the organised labour movement in the Country concerning their most recent threat.
“We believe that the threat was premature and that there is a need on all sides to ensure that fact finding and diligence is done on what the current state of the downstream and midstream petroleum industry is before any threats or conclusions are arrived at or issued.
“Secondly, Mr. President wishes to assure Nigerians following the announcement by the NNPC limited just yesterday that there will be no increase in the pump price of petroleum motor spirit anywhere in the country.
“We repeat, the President affirms that there will be no increase in the pump price of petroleum motor spirit.
“We also wish to affirm that the President is determined to maintain competitive tension within all sub sectors of the petroleum industry.
“He is determined to ensure that our policy drawn up as well as policy implemented follows the cue that there will not be any single one entity dominating the market.
“The market has been deregulated. It has been liberalised and we are moving forward in that direction without looking back.
“The President also wishes to affirm that there are presently inefficiencies within the midstream and downstream petroleum sub sectors that once very swiftly addressed and cleaned up will ensure that we can maintain prices where they are without having to resort to a reversal of this administration’s deregulation policy in the petroleum industry.
“I wish at this juncture to also provide a set of graphics which the president has authorized me to share with Nigerians that otherwise would be confidential. These are graphics supplied to Mr. president by the NNPCL.
“In the graphic, what you will find is the present cost of refined petroleum motor spirit at the pump in each of the West African nations that neighbour us and I’ll just name some for example, even as I know, you will be showing your audiences the graphics, which the president has graciously approved for public release today.
“Senegal at pump price today of N1,273 equivalent per liter, Guinea at N1,075 per liter, Côte d’ Ivore at N1,048 per litre equivalent in their currency, Mali N1,113 per litre, Central African Republic N1,414 per litre, Nigeria is presently averaging between N568 and N630 per litre.
“We are presently the cheapest, most affordable purchasing state in the West African sub-region by some distance. There is no country that is below N700 per litre.
“So, this is the backdrop we have seen that at the inception of our deregulation policy as of June 1 as Mr. President took office, we have seen PMS consumption in the country drop immediately from 67 million litres per day consumption, down to 46 million litres per day consumption. The impact is evident.
“What it also does mean though, is that we are not at the end of the tunnel. There is still a bit of darkness to travel through to get toward the light. And we are pleading with Nigerians to please be patient with us.
“And as we promised from the beginning, we will be open with Nigerians, we will be transparent with them. And we are ready to show you exactly what it is that our nation is facing with respect to the illiquidity in the market in terms of foreign exchange, as a result of what is now known to have been a gross mismanagement of the Central Bank of Nigeria over the course of several years preceding this time.”
Recall Nigerian NewsDirect had reported how instability in pump prices of PMS associated with the removal of subsidy and foreign exchange (Forex) fluctuation, had plunged the oil downstream subsector into crises, just as projection of intending hike in pump prices has set more worries before Nigerians.
Nigerians have become more agitated in fews day following projections of further hike in pump price of petrol, as the Organised Labour had 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 NLC on Monday, describing the subsisting N617 official price set by the Nigerian National Petroleum Company Limited (NNPCL) as “illegal,” had 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 had 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, a development marketers noted have 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 had said the CBN Importers and Exporters (I&E) official window for foreign exchange, which boast 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 had 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 had 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 had 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 was gathered dealers were not importing petrol despite the licences issued by the government recently to about six marketers to bring in products.
Oil marketers had 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 had angered the Organised Labour which threatened a full blown shut down 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.
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 how 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.
