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Fuel Subsidy Removal: FG, Labour Meeting Ends in Deadlock
Talks between the Federal Government and organised labour over the removal of fuel subsidy ended in a deadlock on Wednesday as they failed to reach a consensus following the hike in petrol pump prices to over N700 from N195 per litre by oil marketers.
The hours-long meeting which was held at the Presidential Villa was to, among other things, prevent a labour crisis following the recent increase in the petrol pump price occasioned by the discontinuance of petroleum subsidy.
Earlier on Wednesday, the Nigerian National Petroleum Corporation Limited said it had adjusted the pump price of Premium Motor Spirit to reflect the market realities. The agency, however, failed to state the new prices of petrol.
However, several retails outlets sold the product between 600 and N800 in Lagos, Abuja , Ogun and some other states.
The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, pointed out that the hike in the cost of PMS would trigger galloping inflation in the country, stressing that some outlets in the South-East were currently dispensing the product at N1,200/l.
Ukadike stated, “Once NNPCL retail stations have adjusted their pumps to reflect the new price, there is nothing you can do about it; that is the new price. As I speak with you, all of them are now selling at the new prices. The situation is so bad, that somewhere in Ebonyi State our members informed us that it is now N1,200/litre.
“We thought the President would remove the subsidy through a seamless means because the source of this petrol is the NNPCL. They are the ones subsidising petroleum products, they are the people who use their revenue to subsidise this product.’’
The IPMAN spokesperson expressed worry over the rate of increase in inflation and hardship that would come as a result of the latest hike in petrol price.
“This hike in petrol price will definitely lead to galloping inflation and will worsen the hardship already being faced by the Nigerian masses. It is not something to cheer about. It came as a surprise and in the coming days, we will see the very harsh ripple effects,” he stated.
Meanwhile, Ukadike has called on the Federal Government and the NNPCL to give other marketers the opportunity to start importing petrol in order to create competition in the sector.
“The NNPCL is importing and has not given people the opportunity to join them in importing so as to see whether private sector operators can import the product cheaper or not. So there is no competition. In a deregulated regime, there must be competition, everyone with capacity should be allowed to import,” the IPMAN official stated.
When asked whether other marketers could resume imports since the government had finally deregulated petrol prices, Ukadike replied, “Marketers can import, but let me tell you some of the factors militating against this. The first is that there won’t be availability of dollars.
“You will source your dollar from the parallel market and if you are not careful in doing this, and you go into the importation of petroleum products, you might not ‘come out of it alive’ at the end of the day.
“So what we are saying is that those advantages that NNPCL has, should be shared with other major importers of petroleum products. If it is through crude buy-back, they should let us know so that independent players such as IPMAN members can come together and be able to use it in the buy-back model.’’
He added, “For independent marketers, the most important thing is that there should be availability of petroleum products, and the government should open up the space for importers and investors to come in.”
NNPCL, the sole importer of petrol into Nigeria for several years running, confirmed the hike in petrol price in a statement and a new pricing template released to marketers nationwide.
But the move has sparked a groundswell of anger across the nation with the Nigeria Labour Congress demanding an immediate reversal of the decision.
The union also said it would hold an emergency meeting on Friday on the fuel price increase which had triggered hoarding and scarcity across the country with attendant rise in transport fares, goods and services.
The fuel price hike by the oil firm is coming 72 hours after President Bola Tinubu declared in his inaugural address on Monday that the subsidy regime had ended.
To pacify the growing anger over the situation, the FG hastily summoned some labour leaders to a meeting at the Presidential Villa, Abuja, on Wednesday evening.
The meeting had in attendance the NLC President, Joe Ajaero and his Trade Union Congress counterpart, Festus Osifo, former NLC President and immediate past governor of Edo State, Adams Oshiomhole, Permanent Secretary, State House, Tijjani Umar, Head of Service of the Federation, Dr Folashade Yemi-Esan, Group Chief Executive Officer of the NNPCL, Mele Kyari, and others, however, ended in a deadlock as the labour and government teams failed to reach a consensus.
Speaking at the end of the meeting, Joe Ajaero, said “As far as labour is concerned, we didn’t have a consensus in this meeting.”
He faulted the NNPCL over an official release published hours earlier reviewing the petrol pump price in its filling stations nationwide.
He said the move puts the labour unions in a difficult position on the negational table.
“That’s the principle of negotiation. You don’t put the partner, ask them to negotiate under gunpoint. The prayer of the NLC is that we go back to the status quo, negotiate, think of alternatives and all the effects and how to manage the effects this action is going to have on the people. If it is an action that must take off.
“The subsidy provision has been made up to the end of June. And before then, conscious people, labour management, and the government should be able to think of what will happen at the end of June. You don’t start it before the time,” Ajaero said.
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El-Rufai Accuses Tinubu’s Govt of Paying Trillions of Naira in Fuel Subsidy
The immediate past Governor of Kaduna State, Nasir El-Rufai, has ignited debate on fuel subsidies, alleging that President Bola Tinubu’s government has spent trillions of Naira subsidizing petrol (PMS) since taking office in May 2023.
This revelation comes amidst ongoing discussions about fuel subsidies in Nigeria.
The government previously announced a removal of fuel subsidies, leading to a rise in pump prices. However, El-Rufai suggests the effort was unsuccessful, forcing a return to subsidies at a reportedly higher cost.
The former governor spoke on Monday in Maiduguri, the Borno State capital while delivering a Lead Paper at the occasion of Capacity Building Workshop on Enhancing Skills of Government Officials in Policy Implementation.
“The present administration,” El-Rufai said, “has so far spent trillions of naira for subsidy, even exceeding pre-removal levels,” he stated.
He claimed the current price of petrol, between N600 and N750 per litre, is artificially low due to the subsidy. Without it, prices could be closer to those of diesel, which currently exceed N1,000 per litre in some areas.
“But as I also said earlier during my presentation, the removal of fuel subsidy by the present administration is another good policy by President Tinubu. I have always supported withdrawal of fuel subsidy.
“But as you can see, in the course of implementation, the government has now realized that the subsidy has to be back, because right now, we are paying a lot of money amounting to trillions of naira for subsidy even more than before, because the impact has been seen and the packages of support that will reduce the impact have not been effective in reducing the impact, and so, the federal government has to backpedal by subsidizing petrol.
“Many people don’t know this. If they want to know whether there is fuel subsidy or not, they should compare the prices of petrol and diesel per litre. This is because, under normal circumstances, petrol suppose to be more expensive than diesel. As it is, diesel is above N1000, while petrol stood at about N600 per litre. So we are still subsidizing for fuel in Nigeria,” he stated.
El-Rufai’s comments raise questions about the effectiveness and sustainability of fuel subsidies in Nigeria. The high cost highlighted by El-Rufai suggests the program may be straining government resources. It remains to be seen how the Tinubu administration will address this issue and whether they plan to revisit subsidy removal attempts.
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APC Suspends National Chairman, Ganduje over Bribery, Corruption Allegations
The All Progressives Congress ward in Ganduje, Dawakin Tofa Local Government Area, has suspended the party’s National Chairman, Dr. Abdullahi Ganduje.
The party ward legal adviser, Halliru Gwanzo, announced the suspension while addressing newsmen in Kano State on Monday.
Gwanzo cited allegations of bribery against Ganduje levelled by the Kano State Government as the reason for the suspension.
“We decided to suspend Dr. Abdullahi Ganduje from the party due to the seriousness of the allegations against him,” Gwanzo said.
Meanwhile, efforts to contact the Chief Press Secretary to the APC National Chairman, Mr Edwin Olufo, failed as his mobile phone was unreachable.
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Tinubu’s Govt Secures $750m World Bank Loan to Boost Electricity
The Federal government has secured a $750 million loan from the World Bank to provide subsidy to developers and operators of solar mini-grids in the country.
The Minister of Finance, Wale Edun, and World Bank’s Country Director for Nigeria, Shubham Chaudhuri, signed the loan agreement on March 31 and February 19 respectively.
The loan, according to a document made available to journalists on Thursday, is aimed at augmenting the supply of electricity to both households and micro, small, and medium-sized enterprises (MSMEs) through a surge in private sector-led distributed renewable energy initiatives.
It read: “The loan will be partly used to provide support to the development and operation of privately owned and operated solar hybrid mini grids in unserved and underserved areas through:
1.1. Minimum Subsidy Tender Carrying out of Minimum Subsidy Tender processes and provision of Minimum Capital Cost Subsidies to selected developers/operators of (a) Isolated mini- grids; (b) Interconnected mini-grids; or (c) Solar rooftop solutions in Participating States.”
Aside from providing the subsidy, the Federal government plans to also provide performance-based grants.
“There will be a provision of Performance-Based Grants to eligible mini-grid operators based on new customer connections for isolated mini-grids and percentage of capital expenditures for interconnected mini-grid projects.
“The grant will also cover Standalone Solar (SAS) Systems for Households, MSMEs, and Agribusinesses. This grant will provide “Support to the expansion of SAS systems for households, MSMEs, and agribusinesses in rural areas through:
2.1. Performance Based Grants for Standalone Solar Provision of Performance Based Grants (“PBGs”) to eligible companies to rapidly deploy SAS solutions in rural and underserved areas, through supply and demand side support and based on independently verified outputs, and to support deployment of solar productive use of electricity (PUE) equipment to MSMEs, agribusinesses and commercial customers.”