Subsidy: Stop 100 per cent fuel importation, Labour charges govt

• Local refining is way out, says PENGASSAN
• Govt using subsidy to blindfold masses, says Okon
• Declare state of emergency, probe on subsidy, says Omoijiade
• Labour to resist presidential candidates calling for removal, says NLC

Notwithstanding proposals and campaign promises to end fuel subsidy, organised labour have insisted that until the Federal Government provides buffers and alternatives for subsidy removal to work, plans against the removal would be kicked against.

for subsidy removal to work, plans against the removal would be kicked against.

Organised labour said putting some of these measures in place, would serve as an alternative to fuel subsidy removal.
The Federal Government has allocated N3.36 trillion for fuel subsidy in 2023, even as the country’s debt profile hits $102 billion.

The Minister of Finance, Zainab Ahmed, who said the 2023 budget proposal has a budget deficit of N10.78 trillion, said it would be funded through domestic and multilateral borrowings and proceeds from privatisation.

With about N11 trillion spent so far on fuel subsidy in seven years, the Federal Government admitted the facility was no longer sustainable, therefore, advocating its removal.

A few months to the proposed removal, the labour movement has threatened to embark on national protest, expressing opposition to the proposal by the Federal Government to increase the pump price of petrol, otherwise known as premium motor spirit (PMS).

Minister of State for Petroleum Resources, Timipre Sylva, at a meeting with critical stakeholders had said that with heightened inflation, the removal of subsidy would further worsen the situation and impose more difficulties on the citizenry.

However, with the Dangote refinery, he said the facility would have significant impact on the fuel supply dynamics, including easing pressure on the economy, especially when combined with the ongoing revamping of the three refineries in the country.

Minister of Finance, Ahmed also told the meeting that the Federal Government would soon unfold the palliative being prepared to cushion the adverse effects of subsidy removal whenever it was implemented.

She said: “We are putting in place a number of measures, one of which is the deployment of alternatives.
“The roll out of enhanced refining capacity, including the 650, 000 barrels per day refinery and also the rehabilitation of the four national refineries that have a combined refining capacity of 450, 000 barrels per day and also the necessary rehabilitation. This would increase the refining capacity and means that we will import less.”

The Nigeria Labour Congress (NLC) is however, opposed to plans by government to remove subsidies without first repairing the nation’s refineries to work effectively.

National President of the NLC, Ayuba Wabba, while presenting the Nigerian Workers Charter of Demands, said a major demand in the workers charter and alternative to fuel subsidy is that the local public refineries must work and also demanded that Nigeria must stop 100 per cent importation of refined petroleum products.

According to him, the NLC and labour movement in Nigeria have over many decades, vehemently stated that the only way to address issues of petrol subsidies is to get the refineries to work.

He berated presidential candidates going around to say that they plan to sell the nation’s refineries and remove subsidies, as moves to further oppress long-suffering Nigerians.

He said they should be ready to defend their positions to Nigerians at the campaigns, saying, “When our irresponsible politicians are talking of removing petrol subsidy without solutions for local competitive production of petroleum products, the labour movement would stoutly resist their neo-liberal agenda.”

Also, the Trade Union Congress of Nigeria (TUC) said the government must ensure that local refineries are operational before thinking of ending the subsidy programme.

National President of TUC, Festus Osifo, said there must be assurances that refineries are fully overhauled and establishment of modular refineries encouraged.

Osifo, who is also the President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said that while the union acknowledged that payment of subsidy for petrol was no longer sustainable, the government must take shrewd measures to ensure the reality of this.

He said: “It is clearly not sustainable for us to be spending trillions in the payment of subsidies. We quite know from the information available to us that the financial situation of this country is in dire straits. We know as well that the amount of money we are using to service debt is even getting higher than our revenue, so it shows clearly that we are in dire straits but our leaders must lead by example.”

General Secretary of PENGASSAN, Lumumba Okugbawa, said any subsidy that is import-driven would be a disaster, stating that citizens would be in a worst situation than they are currently in.

He said refining petroleum products locally was the way to go.
“If you remove subsidy and import, the price will skyrocket. Why can’t we look inwards and refine our products. While we import, we are not in control of the international market price. Look at the Russia/Ukraine crisis and the global energy crisis; because we are not in control, it is difficult, but for those producing their fuel, the situation is different.
“Our exchange rate is not stable. These are the two determinants of import-driven products. Until we produce locally, every other thing talked about is political. Government has assured us that by March, Port Harcourt refinery will be completed and Dangote Refinery is also almost completed, so if all these come on stream, naturally, the price will go down. Let us face the fact. Local refining is the way out. It has been our position over the years,” he said.

President of the Association of Senior Civil Servants of Nigeria (ASCSN), Dr. Tommy Okon, who described subsidy as a scam, said the government could not boastfully account for what Nigeria is consuming. According to him, for any government to keep budgeting so much in the name or subsidy, “to us it is a scam.”

Giving an alternative to fuel subsidy, he said rather than the government spending billions in the name of subsidy, it should look at issues like infrastructure, education and health, among others that could benefit the masses.
“In some states, fuel is sold at almost N400 and you are telling us there is a subsidy. There is no subsidy anywhere. It is just a scam. It is garbage in and garbage out.”

According to him, he endorsed the removal of fuel subsidy, saying: “If the government is using subsidy to blindfold the poor masses, I think it high time the government removed the subsidy and do the needful. Is it too much for the government to provide steady power supply where the informal economy can strive? Is it too much to look at the healthcare sector to be covered with health insurance? Is it too much for the government to give free education up to university level?

“What we are insisting is that government should put the machinery in motion to cushion the effect, because saying you are putting fuel subsidy because of the interest of the poor, you are using that to even oppress the poor. We are not against it but what we are saying government should put infrastructure on ground and when you put it on ground we are at peace with it. What actually are we benefiting from it? Is it the long fuel queues? No good transportation system? The railway we are managing, now insecurity has consumed it. You can only fool us for some time and not all the time. We are tired of policy summersaults.”

A lawyer and expert on labour matters, Paul Omoijiade, said what the country is dealing with is government subsidising corruption.

He said: “It is a fraud. If they deal with the fraud, every other thing will fall in place. The fraud surrounding importation of refined products should be eliminated. If removed, the price will come down. Government should make the refineries work. If the refineries are working, we will not talk of subsidies,” he said.

A labour expert and National President of Food, Beverage and Tobacco Senior Staff Association (FOBTOB), Jimoh Oyibo, said the issue of subsidy should be taken away, stressing that Nigerians should face this issue once and for all.
“My personal view is that why not face this pain, so that for a period of one to three years, we would have come to terms with it and continue with our lives, rather than for the government to continually use subsidy as a common ground for siphoning the treasury meant for me and you”, he said.

Asked if he would canvass salary increases for workers to cushion the effect if government eventually removes subsidy, he said: “Definitely that would happen, because once that happens, every individual company and branch unions will have to engage their management. The unions at the national level will also engage the employers to see how they can adjust; be it transportation, housing, or anything. Everything is going to adjust, including the market woman. Definitely, there would be salary adjustments from both the public and private sector.”

A group, Concerned Citizens Project (CCP) Nigeria, has said if NLC and TUC leaders are not in terms with the proposed stoppage of petroleum subsidy, despite the glaring evidences of the failure of the scheme, they can explore other avenues to prevent high petroleum price in the country.
National Coordinator of the group, Dr. Bello Musa Gwani said: “One important option is to engage with the government to find a more suitable solution. For example, by putting pressure on the government to revamp the three national refineries (in Kaduna, Warri and Port-Harcourt), which can play a significant role in easing the pressure on our forex reserve, thus, strengthening our currency.

“A strong Naira and local refining capacity will make petroleum products cheap even without subsidies. In addition, if these refineries are revamped, hundreds of thousands of direct and indirect jobs will be created, thus creating a multiplier effect in the fight against poverty and the growth of our economy.”

General Secretary of the Non-Academic Union of Universities and Associated Institutions (NASU), Peters Adeyemi, urged presidential candidates to engage workers on alternatives to fuel subsidy.

He said: “The idea is that if subsidy must go, something must come. There must be something that is on the ground and not just by words of mouth. You must have a commitment with the movement in concrete terms on ‘how’ the subsidy will be removed and what will replace it. There must be a workable agenda that will take into cognisance the pains that will be inflicted on the Nigerian people if the government takes certain actions or steps. No presidential candidate has told labour the details of how he will remove the subsidy as at today.”