Finally, deregulation begins, petrol may cost up to N144

fuel_subsidy_TUC denies pact with govt

NLC blames IMF/World Bank, seeks referendum

LCCI lists gains of policy

Labour plans protest, may take Jonathan to ICC

AS Nigerians began the new year with high hopes yesterday, the news they dreaded mostly was delivered: the much-argued deregulation of the downstream sector had begun, meaning that subsidy on petrol had finally been removed.

With this development, the price of a litre of petrol also known as premium motor spirit may rise from N65 to N141.00k, even though the government has not fixed any price in the spirit of deregulation.

The Executive Secretary, Petroleum Products Pricing Regulatory Agency (PPPRA), Reginald Stanley, in a statement yesterday, said that following extensive consultation with stakeholders across the nation, the agency removed the subsidy on Premium Motor Spirit (PMS), in accordance with the powers conferred on it by the law establishing it.

The agency added that by this announcement, the downstream sub-sector of the petroleum industry had been deregulated for PMS, adding that “service providers in the sector are now to procure products and sell them in accordance with the indicative benchmark price to be published fortnight on the PPPRA website.”

According to the statement, “Petroleum products marketers are to note that no one will be paid subsidy on PMS discharges after 1st January 2012.”

PPPRA also assured of “adequate supply of quality products at prices that would be competitive and non-exploitative and so there should be no need for anyone to engage in panic buying or product hoarding.”

It stated that the agency, in conjunction with the Department of Petroleum Resources (DPR) would ensure that consumers were not taken advantage of in any form.

It also noted that the DPR would ensure that the interest of the consumers in terms of quality of products was guaranteed at all times and in line with international best practice. From the records of PPPRA, the landing cost of petrol at stations on December 29, 2011 was N134.22k. With a margin of N9.34k for the marketer, the cost to the consumer would be about N144.00.

Also, figures obtained from the PPRA’s table yesterday indicated that the Minimum Indicative Benchmark Depot Price will be N131.66, while the Maximum Indicative benchmark Open Market Price will be N141.00.

An investigation by The Guardian yesterday showed that some stations around the country had already started hoarding fuel in anticipation of the move, a strategy that threatened to cause artificial scarcity.

And reactions to the move were swift.

The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, yesterday told The Guardian that the decision by the government to remove the fuel subsidy would help the development of the country in the medium- and long-terms.

But he said that the development would negatively affect every sector of the economy in the short run, as it would affect people’s purchasing power, cost of running business, inflation, “but in the end the country would begin to enjoy its benefits.”

He attributed the removal of fuel subsidy to the delay by government to deregulate the downstream sector.  “In this kind of situation, subsidy removal is inevitable”, he added.

Also, the Chairman, Manufacturers Association of Nigeria (MAN), Rev. Isaac Agoye told The Guardian that he would only speak from the point of view of a cleric.

He urged the Federal Government to ensure that it cushioned the effect of subsidy removal on the poor masses and direct the funds to other aspects of the economy.

For former Secretary-General of the National Union of Petroleum and Natural Gas Workers (NUPENG) Frank Kokori, who felt disappointed by the move, the government was a “civilian dictatorship” planted in a democratic set up.

Kokori said that it was unfortunate that government had decided to go ahead with subsidy removal. “I don’t know what they see, may be they have strategies that will cushion its effects on the people, I don’t know. But it is sad that the government did not listen to the voice of the people, particularly the masses that will be largely affected,” he said.

The Executive Director, Operations, Fowobi Enterprises Limited, an independent petroleum-marketing firm, Gbenga Oguntayo, said that the Federal Government has to look at the common man and put palliative measures in place.

The removal of   the fuel subsidy left many motorists stranded on most roads in Abuja yesterday as commercial vehicles effected a 200 per cent increase in the fares.

At the filling stations, confusion was the order of the day as arguments ensued between most motorists and station attendants as the markup in the pump price of petrol caused a major disagreement.

Mot filling stations within the Abuja metropolis have since adjusted their pump price to N140 per litre since yesterday morning even before the removal was officially announced.

The President General of Trade Union Congress (TUC), Peter Esele, told The Guardian yesterday on phone that the meeting and dialogue that government promised did not take place, saying what government embarked upon was monologue.

He said: “I heard about the increase a while ago but yet to confirm it. It is from you (The Guardian) that I am confirming it. I don’t know when the members of the Petroleum Products Pricing Regulatory Agency (PPPRA) met and took the decision on the removal of fuel subsidy. My deputy is a member of the PPPRA and he did not inform me of any meeting  where this kind of decision was taken. I want to say that what government proposed were meetings with major stakeholders before the deregulation takes effect. But this step clearly demonstrates that what government did was pure monologue because there was no consultation with anybody.”

He also gave a glimpse of what will happen between today and tomorrow as he revealed that meetings will be conveyed immediately to consider the situation with a view to mapping out an appropriate response by labour to the move.

The Nigeria Labour Congress (NLC) blamed the economic challenges confronting Nigeria on the adoption of the policies of Bretton Woods institutions notably the International Monetary Fund (IMF) and World Bank by the Goodluck Jonathan administration.

Speaking via a statement issued to commemorate the New Year, Congress President, Abdulwahed Omar, the NLC said that it was shocked that government chose to romanticize antiquated policies that the rest of world was jettisoning.

It said: “The unfolding tragedy in our country today is that years after the world has discarded these ruinous policies and programmes of the World Bank and IMF, the Jonathan administration decided to embrace them as its abiding religion to the extent of employing and relying on their priests to run the entire economy. This is the fact behind the cuts in social spending, deliberate currency devaluation, deregulation, privatisation and attempts to astronomically increase electricity tariff and withdraw oil subsidy. It is this uncritical and subservient acceptance of the worn-out World Bank and IMF policies that is responsible for the on-going divorce of the Jonathan administration from the Nigerian people, and that has created the yawning gap with the populace which had largely supported the administration’s emergence.”

The statement titled ‘Role Up Your Sleeves In 2012,’ which signifies the hard road that lies ahead in 2012, the umbrella body of Nigerian workers described the out-gone year as one that witnessed unprecedented hyper inflation, job losses, insecurity, growing government intolerance and deepening poverty.

While decrying the overbearing influence of few Nigerians nationals who had worked for Bretton Wood institutions, the NLC said that the complete handover of the economy to this group of people to run the entire economy and determine the policy direction of government, left little initiatives to those elected to govern the country in the interest of Nigerians.

Expectedly, the planned removal of fuel subsidy by government featured prominently in the statement as the congress reiterated its opposition to the move.

The congress expressed worry about huge sums of money that was being expended on the fuel removal project, saying the country was losing enormous resources in the campaign.

It added: “Also, while government claims to be ‘consulting’ on the fuel subsidy removal, its commissioners of police in a number of states are boasting that they are armed and battle-ready to smash Nigerians who may publicly protest their feelings against the removal.”

While respecting the right of government to hold consultation with sections of Nigerians with a view to convincing them to endorse deregulation of the downstream sector, the congress challenged government to hold a referendum on the issue.

“Since the concept of ‘consultations’ is nebulous, and there are no objective criteria to determine its outcome, the NLC challenges the government to conduct a referendum on the issue to determine the WILL of the Nigerian people. If it does not, but rather elects to impose its will on the citizenry, the Nigerian people have the fundamental right to resist. Since the fuel subsidy removal is a war foretold, Nigerians must begin preparations to meet this challenge in the New Year. The NLC is working with other mass organisations in the country including professional bodies, pro-people civil society organizations, market associations and other sections of the populace to organise a peaceful and orderly resistance including rallies, strikes and mass protests. Congress asks the populace to support and attend the mass meetings, rallies and sensitisation campaigns which are on-going,” it said.

The congress, therefore, called on Nigerians to take on the challenges in their collective interest as the country marches on towards nationhood.

In a joint statement by Acting General Secretary, Nigeria Labour Congress (NLC) Owei Lakemfa    and   Trade Union Congress (TUC) Secretary General,  John Kolawole,   the two bodies threatened to embark on protests against the government’s decision .

They said  that  “This New Year ‘gift’ by the Presidency is callous, insensitive and is intended to cause anarchy in the country. It is tragic that the Jonathan Government has become the greatest source of insecurity in the country and the spring of danger to the Nigerian nation”.

They  continued : “In the last few days, Jonathan’s administration had told Nigerians that it was consulting us on the issue of fuel subsidy removal and that if any was contemplated, it would be with effect from April 1, 2012.  The NLC and TUC warned Nigerians that this government thrives on falsehood and can therefore not be trusted.  The Presidency’s New Year Day action of removing the fuel subsidy and imposing new fuel prices on the populace is a clear demonstration of the fact that the Jonathan administration cannot be trusted. We also have information that it intends to make a litre of PMS N150.00 and then ask the NNPC to reduce the price at its fuel stations by a few Naira. Nigerians must defeat whatever are the schemes of this government…”

The groups  added : “We also put the Jonathan Presidency and its surrogates on notice that we shall ensure that they are prosecuted up to the International Criminal Court if they, by acts of commission or omission, spill the blood of any Nigerian over the protests that follow their inhuman acts against the people.

“In the next few days, the leadership of the NLC and TUC will jointly issue directives on the date organized national strikes, street demonstrations and mass protests will commence.  We shall neither surrender nor retreat.”


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