Fuel price hike: Labour insists on reversal as Kachikwu says we’ll export fuel in 2019

ABUJA — THE Nigeria Labour Congress,NLC, and its affiliate body, Trade Union Congress,TUC, yesterday, vowed to press ahead with its industrial action scheduled to commence tomorrow if the Federal Government failed to revert to old pump price of petrol. This came as the House of Representatives started its special plenary on fuel price hike on a rowdy note.  

Also, labour leaders and others met with the leadership of Department of State Service, DSS, and Nigeria Police Force, NPF, over the security implications of the planned industrial action billed to start tomorrow. NLC and TUC also asked the government to not only put all the nation’s refineries to optimal use, but also increase minimum wage, besides putting all necessary palliatives measures before deregulation of oil. Leaders of NLC and TUC spoke formal commencement of the meeting it held with the government over May 11 increment of fuel price. But the government pleaded with the labour organisations to see reasons with its action and shelve its planned strike, saying it was open to dialogue with the bodies. This was even as the governor of Edo State, Adams Oshiomhole, who was at the meeting to mediate between labour, said opposed agitation for wage increment, saying it was not sustainable at the moment. Factional NLC president, Ayuba Wabba and President of TUC, Bobboi Kaigama, said there was the need for government to reverse to old pump price of fuel, given that the development was having a toll on the masses. At the time of this report, both government and labour had not shifted. Dr Chris Ngige, who presented government’s position, said the government was opened to dialogue, urging the labour leaders to consider the proposed industrial action as the least possible option. Among those that were at the meeting included factional President of NLC, ,Ayuba Wabba and ,Joe Ajaero, General Secretary of NLC, Dr. ,Peter Ozo-Eson, NUPENG P resident, Igwe Achese, PENGASSAN President, Francis Olabode Johnson, President of TUC, Bobboi Kaigma, Governor dams Oshiomhole of Edo State, Minister of Labour & Employment ,Dr Chris Ngige, Senior Special Assistant to the President on National Assembly Matters (Senate),Senator Ita Enang, Secretary Government of the Federation, SGF, Engr. Babachir Lawal. Others were Ministers of State, Petroleum, Ibe Kachukwu, of f Budget and National Planning, Udo Udoma, Information and Culture,,Lai Mohammed and Solid Minerals, Kayode Fayemi. At the meeting were the Secretary to Government of the Federation, SGF, Babachir Lawal, Minister of State, Petroleum, Ibe Kachukwu, Ministers of Labour and Employment, Dr Chris Ngige, Budget and National Planning, Udo Udoma, Information and Culture, Lai Mohammed and Solid Minerals, Kayode Fayemi. Before the meeting dissolved into a technical session, newsmen were asked to leave. Uproar in House of Reps over petrol price The rowdy session which lasted about 35minutes, eventually led to a one and half hours closed door session by the lawmakers where their differences were ironed out and the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, ushered in. The House also resolved immediately after the minister’s presentation that Nigeria Labour Congress, NLC, should shelve its proposed industrial action tomorrow. Consequently, a 17-man committee, led by the Majority Whip, Alhassan Ado Doguwa, was set up to mediate with the apex labour body in the country. However, at about 12.15pm, trouble started when the Speaker, Yakubu Dogara, immediately after prayers, read the proceedings of the previous week and moved for the admittance of the Minister of State for Petroleum Resources, Kachikwu, into the chamber but shouts of No! No! No! greeted the speaker’s declaration. But after the speaker ended his comments, allowing the leader to move the motion, there was a resounding ‘nay’ from opposition lawmakers, mostly PDP, in rejection of the motion. Dogara, however, ignored the strength of the ‘nay’ prayers by ruling in favour of the ‘ayes’. This was immediately after the majority leader moved for the admittance of Dr Kachikwu. Some members, waving the national flag, started shouting “All we are saying, save Nigeria,” while others started chanting “Change.” Another set of lawmakers, predominantly PDP Reps, started shouting “Shame!”, “Shame!” At this stage, the Minority Leader, Leo Ogor, at about 12.19pm, approached the speaker and after a brief chat with him, joined his fellow lawmakers. Also the Majority Leader, Femi Gbajabiamila, and some of the lawmakers approached the speaker but the noise continued as all attempts by the Majority Whip, Ado Doguwa, to calm the lawmakers failed. Suddenly, frayed tempers cooled and the speaker gave the minority leader the floor and he immediately moved for a closed door meeting. After a two-hour closed door session, the lawmakers admitted the minister, who immediately read his presentation and a question and answer session ensued. We’ll export fuel in 2019—Kachikwu In his presentation, the minister explained that the sale of petrol at the price range would help to get all the nation’s refineries working by 2018, adding that Nigeria would begin exportation of refined petroleum products by 2019. Kachikwu boasted that the new price regime had gone into effect, adding that “the market has stabilised in matter of days, in terms of product availability.” He also noted that the queues had virtually disappeared and that smuggling and diversion would diminish substantially. Subsidy removal to earn Nigeria $1bn quarterly He said: “We first looked at the number of litres on which subsidy was being paid, the new policy is to address those subsidy issues as well as product availability and distribution which is saving Nigeria about $1 billion quarterly,” Kachikwu, also condemned the incessant attacks on oil installations in the country, noting that Nigeria had lost over 800,000 barrels of crude oil in recent attacks. According to him, because of the incessant pipeline ruptures that have happened in incessant attacks in states in those areas, Nigeria has lost over 800,000 barrels of oil. “We declined from 2.2 million barrels, which was the focus of the 2016 budget, to 1.4 million barrels as of today,” he said. Kachikwu, however, expressed the ministry’s commitment to ensuring that affected facilities were repaired and effectively protected. “We are going to work hard to see how we will get these issues resolved and get our production back,” the minister said. Infrastructure development Kachikwu further restated the need to develop infrastructure which he described as key to promoting increased and efficient crude oil production. He said: “There is still a whole lot of things we need to pay attention to; infrastructure is key but we have not as a country over the last 20 years invested in infrastructure in the oil sector. “Our pipelines are 35 years old and none has been replaced. We have not been able to put gas infrastructure in place, our refineries are next to comatose and old and we are working hard on them. “Our critical facilities are at a breakdown stage, so no serious development of infrastructure has taken place. No country in the world would expect that the price system in the country will benefit its citizens if it doesn’t invest in infrastructure. “So rather the energy we put on PMS, we need to begin to focus on building massive infrastructure all over the country. I know how much efforts it has taken to pump products from the South to the North, to the East and to the West. “It has been one battle after another, but the time has come to invest in proper pipelines, proper tracking, proper buried levels and begin to move with the world,” Kachikwu said. DSS boss, IGP, meet labour leaders, others over strike Meanwhile, labour leaders and their civil society counterparts met for over four hours, yesterday, with the Inspector-General of Police and Director of Department of State Service, DSS, over the security implication of the strike scheduled to start tomorrow. The meeting, which started at 11 a.m. and terminated at about 4 pm, was a prelude to the meeting between the Federal Government and labour leaders over the proposed strike. The meeting started at about 7p.m. Vanguard was informed that the meeting, which lasted about four hours at the office of the Director-General of DSS, Mr. Musa Lawan Daura, was also attended by the Inspector-General of Police, Mr. Solomon Arase. A source said those who turned up for the meeting included the President of Trade Union Congress of Nigeria, TUC, Mr. Bobboi Kaigama, factional President of Nigeria Labour Congress, NLC, Mr. Ayuba Wabba; leaders of the Petroleum Tanker Drivers, PTD, branch of Nigeria Union of Petroleum and Natural Gas Workers, NUPENG; petroleum marketers, among others. It was gathered that the security chiefs discussed with the labour leaders and others on how to ensure that the planned strike did not degenerate to violence or breach the security of the nation. Further fuel price hike looms However, the rebound in the price of crude oil in the international market continued, yesterday, fuelling fears of a further hike in the price of Premium Motor Spirit, PMS, also known as petrol, in Nigeria. Specifically, the price of Brent, the benchmark crude oil, rose to $48.89 per barrel, yesterday, from $45.52 per barrel recorded last Wednesday, when the Federal Government announced the hike in the price of fuel, representing an increase of 7.2 per cent. To this end, the Department for Petroleum Resources, DPR, has warned petrol station owners to be vigilant, as unscrupulous individuals were on the prowl, cashing in on the fuel crisis and new pump price to defraud station owners. The rebound was attributed to the shutdowns and disruption in crude oil export in Nigeria, with Goldman Sachs saying the market had ended almost two years of over-supply and was now in deficit. DPR warns The warning of DPR came on the heels of the arrest by the Nigeria Security and Civil Defence Corps, NSCDC, of one Sadiq Umar, for allegedly posing as a staff of DPR. Umar was arrested while trying to extort money from the Manager of A.Y.M. Sharfa Filling Station, along Mararaba Road in Karu Local Government Area of Nasarawa State. In an interview in Abuja, Head, DPR Zonal Office, Abuja, Mr. Saidu Mohammed, said the suspect would be prosecuted to serve as a deterrent to others. Speaking on the arrest, Mr. Robert Ibuh, Divisional Officer, NSCDC, confirmed that the suspect had committed a criminal offence and would be prosecuted. Also speaking, Mr. Shehu Idris, the manager of the affected station, regretted that extortions from different illegal oil regulators negated the growth of their businesses. ‘No alternative to deregulation’ The Federal Government, yesterday, insisted that there was no alternative to the new petrol price regime and appealed to the leadership of labour unions and Nigerians for understanding, arguing that the current hardship would not last for long. Addressing journalists in Abuja, Minister of Information, Alhaji Lai Mohammed, said the paucity of foreign exchange had made it impossible for Nigerian National Petroleum Corporation, NNPC, to continue to solely import petrol. According to Mohammed, “many have been asking why this would happen at this time and what triggered the decision concerning the new framework for petrol products supply, distribution and pricing. “We have no choice than to liberalise the price of petrol, if we are to end the crippling fuel scarcity that has enveloped the country, ensure the availability of the products and end the suffering of our people over the lingering scarcity. “With the drastic fall in the price of crude oil, which is the nation’s main foreign exchange earner, there has also been a drastic reduction in the amount of foreign exchange available. “The unavailability of forex and the inability to open letters of credit have forced marketers to stop product importation and imposed over 90 percent supply on NNPC since October 2015, in contrast to the past where NNPC supplied 48 percent of national requirement. “The truth is that NNPC does not have the resources for, nor is it designed to meet this increase in supply. The result is the crippling fuel situation across the country. Pushed to supply 90 percent of the products required for domestic consumption, NNPC has continued to utilise crude oil volumes outside the 445,000 barrels/day allocated to it, thereby creating major funding and remittance gaps into the federation account. “In the absence of available forex lines or crude volumes to continue massive importation of PMS, it is clear that unless immediate action is taken to liberalise the petroleum supply and distribution, the queues will persist, diversion will worsen and the current prices will spiral out of control.” No return to subsidy Mohammed explained further that even if the nation’s forex exchange earnings improved in the future, government would not return to the subsidy regime. He said: “As of today, NNPC is forced to dip its hands into the federation crude. The main reason for this price regime is that the country does not have enough foreign exchange to open Letters of Credit for all those who want to import products. “It does not mean that if tomorrow our foreign exchange improves that we will reverse the policy because we can use our foreign exchange for better things— roads, railways and power. “We must never be tempted to go back to the regime where we will have to pay subsidy because what we will see is that the cost of, if we are lucky today and crude goes to $100 pbl, products will be higher because the cost of crude accounts for 80 percent of total cost of refined products.” He noted that there was no basis for comparing the current liberalisation with the botched attempt of the administration of former President, Dr. Goodluck Jonathan, to remove fuel subsidy in 2012. He argued that at that time, the nation had a good foreign exchange base, with high crude oil price which had become the opposite. He said that the new policy was in national interests, adding that “at some point in life, you have to take hard decisions and those decisions you are taking are in the long-term interest of everybody.” The minister said the policy was not a removal of subsidy, as there was no provision for subsidy in the 2016 budget, in the first instance. He said: “As I said earlier, there is no provision for subsidy in the 2016 Appropriation. The erstwhile PMS price of N86.50 gives an estimated subsidy claim of N13.7 per litre, which translates to N16.4 billion monthly. There is neither funding nor appropriation to cover this.” On Niger Delta militants On Niger Delta militants, the minister said the current administration was ready to listen to whatever grievances the people of the Niger Delta had, but that it must be properly channeled and that vandalism of infrastructure should not be an option as it can only further create development challenges. His words: “The attacks on critical infrastructure in the region has led to the loss of over 500,000 barrels per day; it has led to the loss of over 1000 mwts of electricity. “Our appeal to our brothers in the Niger Delta is that you do not piss into your own house. If you blow the critical infrastructure, it will slow down the development you are asking for. It will hurt the same people whose interests you want to protect. “So there will be dialogue but no government would like to be held to ransom. This government is a listening government. It is ready to listen to everybody. But they must be conducted within the parameters of law and decency.”