The Federal Government is boldly getting out of its denial of paying subsidy of a whopping N1 trillion annually on petrol, even as a damning video has gone viral of governments wasteful spending at near-moribund refineries; but the Group Managing Director of Nigeria National Petroleum Corporation NNPC, Mr. Mele Kyari, says the corporation can no longer bear the over N120 billion monthly subsidy for Premium Motor Spirit (PMS).
But the Labour on Thursday night, through the President of the Nigeria Labour Congress (NLC), Mr. Ayuba Wabba, says it will not accept any deregulation of the sector that would transfer government’s inefficiency to impoverished Nigerians by way of increased pump price.
“Nigerians also cannot bear it (the cost of petrol hike) because they are so impoverished that they can’t also bear the inefficiency of our system for these numbers of years.
“We are the only member of the Operation of Petroleum Exporting Countries (OPEC) that is importing refined products. It is because of the inefficiency of governments – both past and present – that we are not able to fix our refineries.
“For sure, many people have been pushed below the poverty line. Not only that, anytime you increase the price of petrol, prices of goods and services will go up and not only that, the purchasing powers of many Nigerians will also be eroded. It is between the devil and the deep blue sea.
“There must be a way to make sure that Nigerians don’t suffer the consequences of what they have not bargained for. Those are the clear issues i think should come out of these conventions.
“You are aware that economies around the world – including that of Nigeria – just came out of recession and many businesses are not doing well or they have closed and many individuals, including workers, have been pushed almost to the wall.
“The consequences of fuel price hike will be so grievous, it will bring about instability, insecurity because where families can’t take care of their needs you should know also that everybody will be on their own and it will lead to some social consequences.
“We will not accept a situation where the burden will now be shifted from the government to Nigerians. We have submitted a document to point out that 159 countries still subsidise energy in this challenging period.
“Government must find means to make sure that we don’t transfer this inefficiency to the Nigerian public.
“The figure (N120b) also quoted are issues that are associated with the so – called subsidy because even how many litres we consume per day has remained a controversy. In this type of situation this is where accountability and transparency comes in.
“The policy option of continuing to impose higher pay on Nigerians is not something that can be pushed down the throat of Nigerians at this very difficult time.”
According to the NNPC boss, Kyari, at a press conference by the Presidential Communication Team at the State House, Abuja, on Thursday, the actual cost of importation and handling charges of petrol (PMS) amounts to N234 per litre of, while the government is selling at N162 per litre.
He added that the NNPC absorbs the cost differential which is recorded in its financial books.
Kyari, however, said that since NNPC could no longer bear the cost, sooner or later Nigerians would have to pay the actual cost for the commodity.
According to the GMD, the NNPC pays between N100 billion and N120 billion a month to keep the pump price at the current levels.
He said that market forces must be allowed to determine the pump price of petrol in the country.
“Our current consumption (evacuation) from our depots is about 60million litres per day. We are selling at N162 a litre. Current market price is 234, actual market price today.
“The difference between the two, multiply by 60million, times thirty, will give you per month.
“This is a simple calculation you do. If you want exact figures from our book, I do not have it from this moment but it’s between N100billion and N120billion per month.
“We are putting the difference in the books of NNPC and we cannot continue to bear,’’ he said.
The Minister of State for Petroleum Resources, Timipre Sylva, who also spoke at the event, expressed the hope that the Petroleum Industry Bill (PIB) would be passed into law in April.
According to him, frantic efforts are being made by the legislators to complete work on the bill and pass it, in line with the aspirations of critical stakeholders in the petroleum sector.
“The National Assembly has expressed the intent to pass the PIB into law by April 2021, every effort is being made to support the National Assembly to meet this target,” he said.
While enumerating the gains of the PIB to Nigerians, the minister said it would create additional
infrastructure across petroleum value chain.
He added that it would increase petroleum activities as well as enhance the livelihood of inhabitants of oil producing communities.
He said the bill would create additional infrastructure across the petroleum value chain especially from mid-stream and down-stream.
He added that critical infrastructure would also be developed, while utilising the incremental revenue from increased petroleum activities.
Sylva said it would also provide additional infrastructure in the host communities arising from the host community trust.
The minister further stated that more businesses would be set up to support increased activities within the petroleum value chain.
“Greater confidence would be engendered with certainty in the petroleum industry, which will lead to increased investments.
“Nigeria will occupy its place among commits of nations who have updated their petroleum industry laws in line with current realities.
“The bill will also enable a structured monetisation of fossil fuel resources before the whole world turns to renewables.
“It will also impact positively on the Nigerian economy with multiplier effect on the petroleum sector,’’ he said.
The minister also expressed the hope that the bill when passed, would lead to an increase in the use of gas for domestic purposes.
He said this would create a healthier society as well as provide job opportunities across the country.
Leadership of the Nigeria Labour Congress (NLC) on Thursday night said it won’t accede to plans by the Federal Government to fully deregulate petrol pricing because it is no longer able to sustain the subsidy regime.
TheNewsGuru.com, TNG reports that the Nigerian National Petroleum Corporation (NNPC) said it will stop bearing the N120 billion monthly subsidy on the cost of petrol consumption by Nigerians.
“Deregulation of PMS (petrol) has continued to elude us. We expect that this year, we will be able to achieve that,” he had said.
The NNPC boss on his part said the corporation absorbs the cost differential, which is recorded in its books.
He said while the actual cost of importation and handling charges is N234 per litre, the product sells at N162 per litre.
He said the burden had become too heavy for the NNPC to bear.
According to him, after talks with the Organised Labour, the market forces would determine prices of petroleum products.