The two factions of the Nigerian Labour Congress (NLC), the Trade Union Congress (TUC) and members of Civil Societies, yesterday, rose from their respective emergency National Executive Council (NEC) meetings, vowing to call out Nigerians on a nationwide strike on Wednesday if the Federal Government fails to retrace its steps on the contentious N145 new pump price of petrol recently announced by the Minister of State for Petroleum, Dr. Ibe Kachikwu.
The announcement by the junior minister ‘deregulating’ the downstream sector of the Nigerian oil and gas industry has also ignited another round of free fall of the naira in the foreign exchange market.
A development the president of Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said was caused by the permission the minister granted the fuel importers to source their foreign exchange from secondary sources.
According to him, the market had been stable all this while due to drastic reduction in imports, “but the announcement on Wednesday has changed the whole thing.” He fears that the exchange rate will rise to N400 a dollar this week if the condition persists. On Thursday, the naira lost N7 to the dollar as exchange rate rose sharply to N334 per dollar from N320 per dollar.
This persisted on Friday with the parallel market exchange rate rising to N370 per dollar which translated to N50 depreciation of the naira in two days.
Kachikwu had said that the lingering fuel scarcity in the country was caused by the forex crisis in the country since the collapse of the prices of crude in the international market.
A development that forced the Central Bank of Nigeria (CBN) to peg the official exchange rate of the naira against the US Dollar at N197 a dollar.
He said, “The reason for the current problem is the inability of importers of petroleum products to source foreign exchange at the official rate due to the massive decline of foreign exchange earnings of the Federal Government. As a result, private marketers have been unable to meet their approximate 50 per cent portion of total national supply of PMS (Premium Motor Spirit, also known as Petrol).”
It is against this backdrop that experts say that unless the fuel subsidy is retained, the importers will in the nearest future, increase the pump price of petrol again, otherwise, they will be running at a loss and will not be able to go back and import more.
The options available then are that the subsidy is retained and the price pegged or the importers continue to bring in the product at the rate naira is exchanging with the dollar at the forex market and sell as he buys.
The implication, according to a former president of Association of National Accountant of Nigeria (ANAN) Dr. Samuel Nzekwe, is that price of petrol would rise to N200 a litre gvery soon and will then fall down slowly if the naira stabilises.
Meanwhile, the organised labour, accused the President Muhammadu Buhari administration of betrayal of trust reposed on him by Nigerians, stating that the hardship the administration has brought on Nigerians since its inception over a year ago is not in tandem with the change mantra of the ruling All Progressives Congress (APC) which Nigerians voted for.
President of the Wabbaled faction of NLC, Comrade Ayuba Wabba, at the end of the union’s meeting in Abuja yesterday, lamented that President Muhammadu Buhari had broken his electioneering promise of not removing fuel subsidy if he was elected.
According to him, the Congress would on Wednesday May 18 mobilise Nigerians to the streets, close down the airports, sea ports as well as all public and private offices after which he added that the labour unions would direct Nigerian workers to embark on indefinite industrial action as their response to the government’s policy.
The NLC President, who read the communiqué issued at the end of the meeting on behalf of other unions, lamented what he called the Federal Government’s disinclination for consultation on issues of public interest and its obsession with protecting product marketers at the expense of the Nigerian public.
The Comrade Joe Ajeroled NLC, which concluded its emergency Central Working Committee (CWC) meeting, in Lagos yesterday afternoon, said, “Where the government fails to heed these calls and correct itself, we shall be forced to call Nigerian workers and masses out onn the streets all over the country to shut the critical sectors of this economy down for as long as it shall take to force the government to subject itself to the desires of the people.”
Comrade Wabba noted that after his election, President Muhammadu Buhari had maintained that there was no subsidy in the petroleum product price regime and that even if there was, he did not see how its removal would be beneficial to the ordinary Nigerian, noting that the slightest product price adjustment often leads to inflationary spiral and unimaginable suffering for the people.
“On January 18, 2016, the government further allayed the fears of the Nigerian people by reducing the pump price of PMS to N86:50, explaining that the reduction was in furtherance of the implementation of the revised component of the Petroleum Products Pricing for PMS and kerosene,” he said.
The unions also blasted Kachikwu for allegedly speaking from both sides of his mouth saying, “Whereas last year, he had strongly canvassed for the removal of ‘subsidy’ in defiance of President Buhari, about a month ago, he claimed the subsidy had been removed through his ingenuity and that Nigeria was saving $1billion from this process”.
The unions had, therefore, wondered what informed government’s sudden and dangerous policy summersault and its desperate attempt to convince the public that Labour was part of the decision that led to this price increase.
They further said that the new price announced by the Federal Government without the input of the board of the Petroleum Products Pricing Regulatory Agency (PPPRA), which is statutorily vested with powers to recommend price, is illegal, noting that since the board of PPPRA was yet to be constituted, the Federal Government has no right to fix price unilaterally.
While arguing that the new price increase is unrealistic, unaffordable, unacceptable and is thus rejected by Nigerian workers, the NLC President said that there has been no increase, in the past five years, in salaries or wages or pensions in the face of devaluations, spiralling inflation and other vagaries of the economy.
He said that government is unable to justify the price increase other than the puerile explanation that marketers need to recover their costs, without a thought for the aggregate or larger national interest including the need for local refining and creation of jobs.
Speaking also on the increase in electricity tariff, Comrade Wabba said that government has remained recalcitrant in spite of a subsisting court injunction on the issue of the criminal increase in electricity tariff even in the face of everworsening power supply situation.
“From the foregoing, it is evident that the neo-liberal forces in the government have taken over the government and we should expect more inhumane policies which will further degrade the living standard of the average Nigerian. The punitive electricity tariff and PMS product prices may just be teasers.”
On the position of National Union of Petrol and Natural Gas Workers (NUPENG) and Petrol and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), who have already supported the deregulation of the oil and gas sector, the NLC President said: ”NLC, TUC and other civil society allies are not unaware of the positions taken by the Unions in the oil and gas industry.”
“A process of engagement will be put in place in order to ensure the success of the struggle to protect the overall interest of the Nigerian people,” he added.