Officials of the Trade Union Congress (TUC), Nigeria Labour Congress (NLC), Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Independent Petroleum Marketers Association of Nigeria (IPMAN), among others, have debated the conditions the federal government should meet before stopping fuel subsidy.
Quadri Olaleye, the National President, TUC, blamed the federal government for the country’s energy crisis, which he said is “solely due to the incompetence and corruption of the government.”
He said, “The fuel subsidy and the proposed hike in fuel price is a rather prominent and recurring one. Nigeria is the only OPEC member country that imports more than 90 to 95 per cent of refined petroleum products for consumption.
“Nigeria has a total of five refineries across the country of which four are owned and managed by the government, and one by NDPR (Niger Delta Petroleum Resources Limited).
“It might interest you to know that none of the government-owned refineries is functioning, yet in the past 10 years alone, the government has wasted about $9.5bn for turnaround maintenance of the moribund refineries.”
Olaleye noted that the TUC was not against the removal of the fuel subsidy if it would yield positive results.
The TUC president added: “Rather, we are inquisitive as to what the government has to offer following the removal.
“How can we trust the government and be certain that they will actually remove it this time round, because in the past, they have claimed to remove the so called ‘subsidy’, so how can what has been removed be removed again?
“Will there be construction and utilisation of modular refineries as the government has previously promised and failed to deliver? Will there be a rehabilitation of existing moribund refineries?
“What will the government do to put an end to dependence on imported fuel? It is imperative to note these questions because we need adequate answers on what the government has to offer as failed promises from the government have become the order of the day.”
The TUC demanded that if the subsidy was eventually removed, the government should engage more on expenditures that were beneficial to the economy rather than projects that generate losses.
“There should be the establishment of modular refineries and construction of functioning refineries in the country,” Olaleye said.
He added, “Proactive committees must be set up to check, balance, and ensure successful execution of projects and to generally oversee activities.
“The moribund refineries must be active and we must put an end to the counterproductive acts of importing petroleum products when we can refine here and sell at a competitive price.”
He said Nigeria had the capacity to meet these demands and even diversify like advanced countries, “but that will not happen because the current political class does not want it.
“Finally, if these demands are not met, organised labour shall respond.”
Also speaking on the issue of petrol subsidy, the National President, IPMAN, Debo Ahmed, gave credence to the position of the TUC.
He said, “We are in support of subsidy removal but there are some conditions that we have that should be met, such as the availability of products, proximity of supply, and other related issues.
“What we would love to see is that the government makes sure that most of these moribund refineries are on the ground and functioning.
“If most of these refineries are working, it will be easy for the implementation of subsidy removal, because products will not be subjected to foreign exchange.”
Ahmed added, “It will enhance local production with improved sales. We want them to make sure that these refineries are working and proximity to products is made available.”
The debate around fuel subsidy removal has dragged for as long as the federal and state governments have been calling for its removal due to its depleting impact on their monthly revenues.
What you should know
Fuel subsidy have been in place in Nigeria since the 1970s. It began with the government routinely selling petrol to Nigerians at below cost. But most Nigerians were unaware that this was being done.
Fuel subsidies became institutionalised in 1977, following the promulgation of the Price Control Act which made it illegal for some products (including petrol) to be sold above the regulated price.
This law was introduced by former President Olusegun Obasanjo in order to cushion the effects of the global “Great Inflation” era of the 1970s, caused by a world-wide increase in energy prices.
BizWatch Nigeria, however, understands that the payment of fuel subsidy has been a source of concern for stakeholders, and international bodies, who argue that it is a burden the government must yank off for the purpose of the economy.
Lamenting how fuel subsidy is dampening the nation’s purse, Governor of Kaduna State, Malam Nasir El-Rufai had stated that Nigeria is losing N250 billion a month on petrol subsidy.
