After being consulted prior to the deregulation of the downstream sector of the oil industry, the Nigeria Labour Congress (NLC) yesterday resolved to join forces with the Trade Union Congress (TUC) to mobilise Nigerian workers to shut down the whole country starting from next week Wednesday should the federal government fail to reverse the recent hike in the price of petrol from N86.50 to N145 per litre.

However, in a sign of a major crack in the labour family, The National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) yesterday applauded government’s decision to deregulate and scrap fuel subsidy, describing the decision as courageous and long overdue.

They made their positions known at a press conference staged at the end of their joint National Executive Council (NEC) meeting held at the Transcorp Hotel in Calabar.

In a related development, Vice President, Prof. Yemi Osinbajo yesterday stated the rationale behind the federal government removal of fuel subsidy, saying it could no longer provide the foreign exchange for the importation of the product.

The NLC threat to shut down the nation was made after its National Executive Council (NEC) meeting held at the Labour House, Abuja.

The NLC NEC gave the federal government till midnight of Tuesday within which to revert to the old prices of petrol products and electricity, or face a total nationwide strike.

The congress said there would be formal communication today in Abuja about the strike option, and that labour will address all the issues at stake and plans to ground the whole country.

“The NLC has deliberately delayed their press conference till today (Saturday) in order to liaise with their TUC counterpart, harmonise their positions and jointly address the media,” said a source.

Labour also directed all its affiliate unions across the states to put in place a monitoring team to ensure the success of the planned strike.

Osinbajo: we can no longer provide forex for fuel importation

Meanwhile, the Vice President, Prof. Yemi Osinbajo has clarified that the federal government removed petrol subsidy because it could no longer provide the foreign exchange for the importation of the product.

Osinbajo said the issue was not subsidy removal but foreign exchange problem, and described President Muhammadu Buhari as one of the pro-subsidy advocates.

In a statement made available yesterday by his spokesman, Mr. Laolu Akande, the vice president revealed that since last year, the private marketers had imported little or no product because they had been unable to get enough foreign exchange from the Central Bank of Nigeria (CBN).

He noted that until three months ago, the marketers had sourced their foreign exchange from the apex bank at the official rate.

“However, since late last year, independent marketers have brought in little or no fuel because they have been unable to get foreign exchange from the CBN. The CBN simply did not have enough. (In April, oil earnings dipped to $550 million. The amount required for fuel importation alone is about $225million!),” Osinbajo said.

“I have read the various observations about the fuel pricing regime and the attendant issues generated. All certainly have strong points. The most important issue of course is how to shield the poor from the worst effects of the policy,” he added.

Providing further explanation to justify the measure, Osinbajo said the real issue was not a removal of subsidy, adding that a $40 a barrel there was not much of a subsidy to remove.

He described President Muhammadu Buhari as probably one of the most convinced pro-subsidy advocates.

“What happened is as follows: our local consumption of fuel is almost entirely imported. The NNPC exchanges crude from its joint venture share to provide about 50 per cent of local fuel consumption. The remaining 50 per cent is imported by major and independent marketers,” he said.

According to him, the NNPC tried to cover the 50 per cent shortfall by dedicating more export crude for domestic consumption.

He said besides the short term depletion of the Federation Account, which is where the federal government and States are paid from, and further cash-call debts pilling up, the corporation also lacked the capacity to distribute 100 per cent of local consumption around the country.

Osinbajo added that previously, NNPC was responsible for only about 50 per cent.

“We realised that we were left with only one option. This was to allow independent marketers and any Nigerian entity to source their own foreign exchange and import fuel. We expect that foreign exchange will be sourced at an average of about N285 to the dollar, (current interbank rate). They would then be restricted to selling at a price between N135 and N145 per litre.

“We expect that with competition, more private refineries, and NNPC refineries working at full capacity, prices will drop considerably. Our target is that by Q4 2018 we should be producing 70% of our fuel needs locally. At the moment even if all the refineries are working optimally they will produce just about 40% of our domestic fuel needs,” Osinbajo explained.

The vice president said he did not mention other details of the PPPRA cost template because he wanted to focus on the cost component largely responsible for the substantial rise, namely foreign exchange.

“This is therefore not a subsidy removal issue but a foreign exchange problem, in the face of dwindling earnings,” he added.

PENGASSAN, NUPENG back FG, demand N90,000 minimum wage…

National President of NUPENG, Comrade Igwe Achese, who addressed journalists on behalf of both bodies, described government’s decision to deregulate the downstream sector as a courageous policy that was long overdue.

“The deregulation of the sector is what we have been agitating for, for the past eight years or more. But each time we want to react, Nigerians want to live on the bedrock of lies. And that has been our problem. We have been living on the bedrock of lies. Successive governments come in, what we hear are full of lies. The oil and gas sector must have transparency and it is only when it is transparent that the nation’s economy will begin to grow and job opportunities would be created.

NUPENG and PENGASSAN however said that they would push for a new minimum wage of N90,000, given the new development. “With the new pump price of N145 per litre, government must speed up the negotiation process for a new minimum wage of N90,000 to cushion the effect of the envisaged inflation. As the price of fuel increases, there should also be an increment in workers’ salary as the old minimum wage of N18,000 has no effect again,’’ they stated.