By Shola AmodemajaÂ
The Nigerian Labour Congress (NLC) has kicked against removal of fuel subsidy on premium motor spirit (PMS) otherwise called petrol and Household Kerosene known as kerosene, faulting the whole process which it argued didnâ€™t follow due process.
The Federal Government had last week announced removal of subsidy on kerosene and put the pump price at N83 per liter while petrol was fixed at N86.50 per liter.
Speaking at a workshop titled: ‘Fuel Subsidy and Petrol Pricing’, the NLC President, Comrade Ayuba Wabba, said the union frowned at the removal of subsidy on kerosene and petrol without due consultations with stakeholders including members of the Board of Petroleum Products Pricing Regulatory Agency (PPPRA).
He noted also that the removal on subsidy on kerosene is to test the waters because the users do not talk unlike the petrol. “The masses are the ones that are affected with kerosene but when the petrol subsidy is announced, and people revolt, kerosene will be cited as successful template for subsidy removal,” he said.
Wabba argued that “By law, the Federal Government, through the PPPRA, is empowered to fix prices of petroleum products. However, only the Board has the powers to do that. We are part of the Board and it is time for the President (Muhammadu Buhari) to constitute the Board of the PPPRA.
“As an organization that has stood to represent the masses, we should not continue to fold our arms on some of this policy pronouncements that in the past we have been able to overcome them.
“I can see clearly that some of the gains we have made in the past have gradually being deluded and I think as a movement, as a people, we stand in the gap to represent the Nigerians, the larger society, we should continue to engage the process and we only do that on the basis of credible information.
“We noticed that the argument has also changed, whereas in the past, they talked of deregulation and price increase, but this time around, it is subsidy removal through price modulation. So, it is the same thing. But since their language has changed, it is also important for us to change our language and effectively engage them,” he said.
Prof. Again Izielen, an economist and a petroleum engineer, noted that the issue of subsidy has been on for quite some time. “The claims by Minister of State for petroleum resources, Dr. Ibe Kachikwu, that if the price modulation fails, government will look back and remove subsidy is faulty. This is because when crude price begins to rise, it will get to point when the poor will not be able to feed except the rich.
“Price modulation is an outdated strategy designed by the world bank to remove subsidy and deregulate fuel prices. However, in reality, this system won’t work because we have several marketers with filling stations with products sourced from different sources. The Department of Petroleum Resources (DPR) which is saddled with the responsibly of ensuring compliance to official pump price of fuel has a slim workforce.
“In Delta State, they are about 20 officials and we have over 1000 filling stations. How many people can go round the entire state to monitor those selling above N86.50 per liter. What marketers do is to sell betweenÂ 5am-8ambecause DPR officials resume byÂ 8am. And they sell betweenÂ 8pm-12pmÂ for those willing to buy at N100 per liter,” he stated.
In his presentation titled: ‘Refining Nigeria Out Of Subsidy Bazaar’, a petroleum consultant and a member of Middle East Petroleum Club, Mr. Sonny Atumah, stated that Nigeria that consumes less than 225,000barrels of petrol per day is not classified as a large consuming nation. He queried why the country has a perennial problem of fuel scarcity.
He argued that there are potentials for up to 6000 investment opportunities when the country refine a barrel of crude. “Refineries as national assets are strategic for energy, infrastructure, technology, skills acquisition and employment, increased gross domestic product, and increased fiscal revenue and therefore reduces national destabilization and tensions in the polity.
“We have a market of 340 million people in west Africa to make us invest in refineries and petrochemical plants. Such investment will make us the real hub in the region as countries that invested in the downstream are not in the quagmire of dwindling revenue from crude oil exports,” he said.
He gave the direct proceeds from crude oil as PMS-47%, Dual Purpose Kerosene-10%, Automotive Gas Oil -23%, Propane-4%, Asphalt-3%, Petrochemical feed stocks-18%. He said total is 105% with five percent refining gain without any loss or waste.