June 5, 2023

Subsidy: NLC shuns meeting with FG; TUC seeks pay rise

Subsidy: NLC shuns meeting with FG; TUC seeks pay rise

By Udeme Akpan, Energy Editor, Victor Ahiuma, Johnbosco Agbakwuru & Emmanuel Elebeke, LAGOS

Leaders of the Nigeria Labour Congress, NLC, yesterday, shunned a scheduled meeting with government officials over the removal of subsidy and subsequent over 200 per cent hike in the pump price of petrol until fuel price is returned to status quo.

Following President Bola Tinubu’s removal of the subsidy during his inauguration speech on May 29, scarcity of the product hit the citizenry nationwide as marketers hoarded and hiked the price of fuel.

A meeting between government officials and labour leaders last Wednesday, ended in a deadlock, as a result of the Nigerian National Petroleum Corporation Limited, NNPCL’s release of a petrol pump price template pegging pump price of petrol at between N488 and N557 per litre.

The meeting was scheduled to continue yesterday but one of the leaders of the NLC told Vanguard that “officials of government have been calling us and we have bluntly told them that we will no longer hold any meeting with them until the pump price of petrol is returned to pre-May 29 price.

“In other words, the pump price of petrol has to return to status quo to give room for negotiation and way forward.’’
However, leaders of the Trade Union Congress of Nigeria, TUC, yesterday met with government officials but the meeting was inconclusive as both parties resolved to continue talks on the issue tomorrow. They also demanded a pay rise to cushion the effects of the subsidy removal.

NLC mobilises for a strike Wednesday

Meanwhile, ahead of the planned nationwide indefinite strike from Wednesday, the NLC has directed its state councils and affiliates to ensure full mobilization of workers and civil society allies among others towards a total strike should the Federal Government refuse to reverse the pump price of petrol to pre-May 29 prices by tomorrow (Tuesday).

In a letter, titled: “Notice on mobilisation for nationwide withdrawal of service,’’ by the General Secretary, Emma Ugboaja, the NLC wrote: “We bring you greetings from the leadership of the Nigeria Labour Congress You will recall that arising from the National Executive Council meeting held on 2nd June 2023, it was decided that congress will embark on a nationwide action and withdrawal of services, against the fraudulent increase in the price of fuel across the 36 states of the Federal Republic of Nigeria and the FCT.

“Please, be informed that the nationwide action will commence on Wednesday, June 7, 2023. To this effect, we request that all state chairpersons should mobilise workers for the action and ensure full compliance with the directives as services in both the public and private sectors are expected to be fully withdrawn by Wednesday, June 7, 2023.

“All state chairpersons are expected to fully abide by the decisions of the National Executive Council.”

Recall that NLC had on Friday in a communique at the end of an emergency National Executive Council, NEC, meeting, “considered the huge suffering pervading the nation, the outrage expressed by the majority and the increased attendant fears of the consequences of the PMS price hike, unanimously condemned the actions of the Federal Government and reached the following conclusion that it was unlawful for the Federal Government to have announced the withdrawal of subsidy on PMS.

“The 2023 Appropriation Act made provisions for funding subsidy regime on PMS till the end of June 2023.

“It is unfair for the government to knowingly take action that will inflict pains on the populace and workers without putting adequate safeguards in place.

“Discussions were already on an understanding reached with the government on the conditions precedent before the withdrawal of subsidy on PMS.

“The local refineries, especially the publicly-owned four, have remained comatose as a result of the government’s inability to get them operationally turned around.

“We cannot accept any petroleum product price increase until products are refined locally. The Federal Government’s decision was unilateral and, therefore, runs counter to the spirit of national consensus and social dialogue.

“NEC-in-session also noted that there is a subsisting judgment of the court that voided the powers of the Nigerian state to deregulate and fix prices of petroleum products in the country.

“Between 1993 and 2023, about $ 6 billion was used for Turn Around Maintenance, TAM, of the refineries without any results. $ 7 billion was given to 14 banks owned by the elite from the public treasury to keep them afloat. Between 2016 and now, N26 trillion was given to the rich as import waivers.

“The NNPC is still unable to tell us how it arrived at the pricing templates and the names of the beneficiaries of the subsidy funds.

“The NEC-in-session subsequently resolved to demand the immediate withdrawal of the vexatious NNPCL price adjustments and revert to the old price in keeping with the 2023 Appropriation Act, to immediately commence effective mobilization of all workers and citizens, in conjunction with the civil society, for a robust and inclusive engagement to resist the imposition of higher prices on PMS on Nigerians.

“NEC-in-session, hereby, affirms a seven-day ultimatum, beginning from Wednesday, May 31, 2023, to the federal government to revert to the old price to allow dialogue to proceed.

“On the expiration of the ultimatum without full compliance by the Federal Government, Congress shall embark on an indefinite nationwide withdrawal of services and mass protests, starting 00:00 hours on Wednesday, June 7, 2023. To this end, all affiliates and state councils of the NLC are directed to immediately commence full mobilization of members to ensure the success of this action nationwide.”

New fuel price’s illegal — NLC President

President of NLC, Comrade Joe Ajaero, said: “The Congress decided that if by Wednesday, the NNPCL, which illegally announced a price regime in the oil sector refuses to reverse itself for negotiation to continue, the NLC and all its affiliates will withdraw their services and commence protests nationwide until this is complied with.

“The NNPCL doesn’t have the monopoly to act illegally even as a private company. The NLC NEC, therefore, directs all state councils and all industrial unions to commence mobilisation from this moment to make sure that this action is enforced. The action has commenced immediately.”

“The NLC is calling for a thorough probe in the process of subsidy to know those involved and the amount involved. Investigate it properly before it is swept under the carpet. The current attempt to sweep the fraudulent practices in the subsidy regime should not be tolerated by all well-meaning Nigerians.”

Checks by Vanguard, weekend, showed that many labour organisations have been mobilising in line with the NLC directive to embark on a protest on Wednesday. The NLC confirmed that it has mobilised 48 affiliate unions, Miyetti Allah Peace Initiative and all its 36 states’ councils including Abuja, to embark on nationwide withdrawal of services, if the government and others failed to reverse the new pump price of fuel.

Nationwide blackout looms as electricity workers join NLC’s planned strike

Electricity workers, under the aegis of the National Union of Electricity Employees, NUEE, said yesterday they would join the NLC in its planned strike over the removal of petrol subsidy.

NUEE, in a notice by Dominic Igwebike, acting general secretary, urged its members to comply with the directive and stop work from the early hours of Wednesday.

The memo read: “Sequel to the Nigeria Labour Congress (NLC) Emergency National Executive Council, NEC, meeting held on June 2, 2023 at the Labour house Abuja, over the sudden removal of fuel subsidy which has brought untold hardship to Nigerians as well as increased inflation in the economy, the NLC has directed that the nationwide withdrawal of Services action will commence on Wednesday, June 7, 2023.

“To this effect, all national, state and chapter executives are requested to start mobilisation of our members in total compliance with this directive.

“Please note that withdrawal of services nationwide commences from 0.00 hours of Wednesday, June 7, 2023.”

FG, TUC meeting inconclusive, to reconvene today

At TUC’s meeting with officials of the Federal Government yesterday, it was inconclusive but TUC president, Festus Osifoh, said some progress had been made.

He said each party had made proposals, adding that while representatives of government would take theirs to the government, TUC would take its own to Congress for harmonisation and approval and then meet again tomorrow.

Osifoh said the Federal Government also promised to reconstitute a minimum wage review committee.

Briefing State House correspondents, the leader of the government delegation, Dele Alake said that the meeting went smoothly with some demands made from both parties.

On the other demands beyond the minimum wage, he said, “It is a list but we are not going to be listing all of them now. The most important is the minimum wage, which is an increase in the minimum wage. Because, when this thing is removed, the argument of Labour is that there is an immediate impact on the workers, on the purchasing power because the price of fuel has gone up.

NUJ mobilises members for nationwide protest

Also, the Nigerian Union of Journalists, NUJ, has rejected the sudden removal of fuel subsidy and directed its members to join the nationwide strike being planned by the NLC from Wednesday, if the NNCPL failed to reverse the hike in pump price of petrol as being demanded by NLC.

In a statement by its National Secretary, Shuaibu Usman Leman, the NUJ said that at an emergency Central Working Committee, CWC, meeting on Saturday, June 3, 2023, it discussed issues surrounding the FG’s decision to remove fuel subsidy and the position taken by the NLC.

The statement read: “After presentations by the National President, Chris Isiguzo, and the National Treasurer, Bamidele Atunbi on the position taken by NLC on the matter, members unanimously adopted the position of NLC on the issue.

“CWC reiterates the argument that although the removal of fuel subsidy will free allocations which can be channelled to the provisions of infrastructure and creation of additional jobs, the sudden removal could, however, lead to social unrest and protests as people may perceive Government as being insensitive to their plight.

“CWC also notes that already there is an astronomical increase in the prices of petroleum products and high inflation which have drastically reduced the purchasing power of citizens.

“Accordingly, CWC directs all state councils of the Union to mobilise members to withdraw their services and commence protests nationwide from Wednesday next week, 7th June 2023, if the Nigerian National Petroleum Company Limited (NNCPL) refuses to reverse the new price regime in the oil sector.”

NNPC winds down crude oil swap contracts — Kyari

Meanwhile, NNPC Limited has concluded plans to stop its crude oil swap contracts with traders as it plans to pay cash for petrol imports.

As a state-owned Corporation, NNPC Limited used to allocate or provide crude oil to importers instead of paying money, in the past.

However, the NNPC Limited Group Chief Executive, Mele Kyari, weekend, disclosed that the new measure is in line with the current deregulation policy of the present administration.

With the withdrawal of fuel subsidy which the NNPC Limited was directly bearing the burden for the Federal Government and expected importation by other parties, especially the major and independent oil marketers, NNPC Limited is expected to be in the best position to pay its importers.

We’ll likely import — IPMAN President

In another interview with Vanguard, the National President of IPMAN, Elder Chinedu Okoronkwo, noted that the downstream sector of the petroleum industry needs strategic actions to stimulate growth.

He disclosed the interest of independent marketers to import, and called on the government to address the high cost of funds, stressing that it affects the total cost of operations in the sector.

Okonkwo said: “The government and other stakeholders should take steps required to reduce the present high cost of funds to increase investment and ease operations. As marketers, we are settling down and will consider importation later.”

We are studying the market — MOMAN

Similarly, the Major Oil Marketers Association of Nigeria, MOMAN, disclosed that its members are currently studying the market with the view to embarking on importation.

MOMAN CEO/ES, Clement Isong, told Vanguard: “The government has taken a bold step. We are currently studying the market for the purpose of embarking on importation.”

FG needs support on fuel subsidy — African Refinery

Despite the resentment of some persons, the African Refinery Port Harcourt Limited, the NNPC Joint Venture Partner in the 100,000 barrels per day refinery currently being developed within the Port Harcourt Refinery Complex has lauded the government for removing fuel subsidy

African Refinery’s CEO, Omotayo Adebajo also called on Nigerians to be patient in the face of the immediate hardship caused by the subsidy removal and support the President’s strategic announcement which in his opinion has been long overdue.

While acknowledging that the subsidy removal has resulted in higher pump prices, he strongly believed that in the long run, the President’s action will boost investment in local refinery capacity in addition to the short-term benefit that subsidy removal will free up money that can be immediately channelled into high impact projects that would benefit the majority of Nigerians.

Implementation of PIA is key —Prof Iledare

However, Executive Director, of Emmanuel Egbogah Foundation, Prof. Omowumi Iledare, said the nation’s Petroleum Industry Act, PIA, has already stated the direction for the sector and other sectors of the petroleum industry and needs consistent implementation.

Egbogah, who expressed disappointment with selective execution by the government, said: “Selective implementation of PIA 2021 is absolutely disappointing. It makes the PIA look like a correct diagnosis of the oil and gas industry but a wrong prescription all because of selective implementation.

I challenged intellectuals to discuss what ought to be and be courageous enough to say things as it is. Honestly, I cannot celebrate this approach to removing subsidy. It is as inefficient as a price ceiling or price floor. A firm dominant pricing of an economic good is anti-competitive and the petroleum authority’s silence is missing in action.”

Increase minimum wage, others — PwC

In its May 2023 report – Fuel subsidy in Nigeria – issues, challenges and the way forward,” the PwC, stated: “On an annual basis, a substantial portion of the national inflow is committed to funding the subsidy scheme.

Of cour there are good reasons for the astronomical growth in subsidy amount – the price of crude oil in the international market, the volume of PMS consumed albeit debatable, and Naira devaluation are some of the drivers. In view of the significance of the amount committed to funding the subsidy regime, there is a need to have a close look at this scheme.”

The report that supports subsidy withdrawal noted that “For the benefit of subsidy to reach its intended recipients, the current structure will need to be reviewed and creatively restructured.”

The report called for increased refining, adding, “Currently, Nigeria imports its refined petroleum products due to limited or no domestic refining. According to Blackgold, Nigeria’s total import for petroleum products is about $28 billion per annum. This makes the country’s fuel price not only dependent on global oil prices and exchange rates but also on importation and handling charges. Local refining is therefore expected to reduce Nigeria’s dependence on imports and potentially stabilise petrol prices.


The report recommended the following palliatives: An increase in the minimum wage – this will ensure that there is support by workers and limit the resistance by the Labour Union; an Increase in the monthly income threshold for PAYE exemption purposes – currently N30,000 per month is exempted from PAYE which can be increased to at least N50,000 per month. This will give extra cash to the employed poor on a monthly basis to cushion the impact of subsidy removal on them. Also, small business owners will benefit by way of higher tax exemption on their equivalent profits for direct assessment.”