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Tag: Fuel subsidy

  • Fed Govt spends N222b on fuel subsidy

    Fed Govt spends N222b on fuel subsidy

    • Buhari to present Supplementary Budget to NASS

    The Federal Government has spent N222.1billion on fuel subsidy from January to July this year, the Permanent Secretary, Federal Ministry of Finance, Mrs. Anastasia Daniel-Nwaobia, has said.

    Mrs Daniel-Nwaobia, told the House of Representatives  panel investigating the implementation of the capital component of this year’s budget, said a supplementary budget would be sent to the National Assemble to cover what has been spent so far.

    At the continuation of the public hearing yesterday, she however said President Muhammadu Buhari is set to present a supplementary budget to the National Assembly.

    Mrs. Daniel-Nwaobia was represented by the the Director-General, Budget Office, Aliyu Gusau, whose presentation also fell short of the panel’s expectations for the second time.

    She defended the extra-budgetary spending, saying it was spent under Emergency Intervention (Fuel Subsidy Crisis) to end the eight-month long fuel scarcity which started in December last year  and ended in July this year.

    She also said Nigeria’s Excess Crude Account (ECA) was depleted to about $4billion by the end of last year and $2.08billion as at June this year due to the drop in oil revenue and payment of petroleum subsidies.

    She said the drop inoil prices also affected  Federal Account Allocation Committee’s (FAAC’s) distribution.

    Mrs. Daniel-Nwaobia  defended a N615.96billion loan from the Ways and Means Account at the Central Bank of Nigeria (CBN) that was secured without the apporval of the National  Assembly.

    “This is an item under contingency funds, but it allows room to obtain loans and things like that, but I am not too conversant with the details,” she said.

    She however said a 2015 supplementary budget would soon be forwarded to the National Assembly by  President  Buhari.

    “I am aware that the Federal Government is handling a number of these issues in the supplementary budget in respect of the 2015 budget. But I am not in a position to pre-empt Mr President in that matter.

    “But I believe that he is fully aware of the situation and I am also aware that we have done something in respect of the supplementary budget that we have passed to Mr President,” she said.

    Chairman of the panel, Ahman Pategi, said it was against the law to have spent the money that was not contained in the Appropriation Act without recourse to the National Assembly.

    He said: “Appropriation is an Act, and we insist on its implementation, we want to know where there are challenges but to spend monies such as the N222.1billion without recourse to the Parliament is not acceptable to us.”

    The Committee also berated the Permanent Secretary, the Budget Office and the Office of the Accountant-General of the Federation (OAGF) for presenting contradictory reports despite being given a week to reconcile their figures.

    For instance, Central Bank of Nigeria (CBN) report put the Nigerian National Petroleum Corporation (NNPC) refund to the Consolidated Revenue Account at N6.330billion per month totalling N44.310billion between January and July this year.

    On the other hand,  the Finance Ministry’s documents showed that NNPC refund was N5.828billion monthly totalling N46.624,766,453.60 between January and August this year.

    The Ministry was also accused of making a confusing presentation to the Committee by failing to distinctly highlight how revenue shortfall in its document affected the capital component of the budget.

    In addition, the Ministry also failed to show details of independent revenue while presenting incomparable figures for actuals and projected revenues for Ministries, Departments and Agencies (MDAs)  for the period under review.

    The affected agencies were given a week to work on their documents again.

  • Fuel subsidy: Refineries’ rebound threatens fuel importers

    Fuel subsidy: Refineries’ rebound threatens fuel importers

    DESPITE minor glitches, there is a ray of hope of boosting local refining of petroleum products with the four refineries showing  recovery signs. In this report, AKINOLA AJIBADE takes a look at the conditions of the refineries before and after their reactivation, the factors that could have led to their sudden transformation and improved power supply.

    The refineries

    •Warri Refining & Petrochemical Company Limited (WRPC)
    Installed capacity 125,000bpd Expected output 100bpd (80%)

    •Port Harcourt Refining Company 1&2 (PHRC)
    Installed capacity 210,000bpd Expected output 126 (60%)

    •Kaduna Refining & Petrochemical Company Limited (KRPC)
    Installed capacity 110,000bpd Expected output 71,000bpd (70%)

    An impressive turnaround or an interesting bounce-back may be fitting  tags  to describe the revolution at the nation’s four refineries. The four, put together, have recorded phenomenal improvement in their production capacities in recent times.

    Though the Warri Refinery has been temporarily shut down on the orders of the Nigerian National Petroleum Corporation (NNPC) for not producing enough petrol, the refineries have been showing remarkable levels of improvement.

    From below 25 per cent production capacity in the last decade to the current 60 per cent production capacity, the refineries are showing signs of recovery.

    The facilities went moribund, no thanks to years of neglect and mismanagement occasioned by lack of policy direction on the part of successive administrations. But, the good news today is that they are now functional, notwithstanding the few  glitches.

    Going by the NNPC data on refineries,  the Port Harcourt Refining Company (PHRC 2) is producing five million litres of petrol; the Warri Refining Petrochemical Company (WRPC) Limited is awaiting the completion of the rehabilitation on its Fluid Cracking Catalytic Unit (FCCU) to raise local production by 3.5 million litres.

    The Kaduna Petrochemical Refining  Company (KPRC) has resumed the production of automotive gas oil (AGO)  otherwise known as diesel, and Dual Purpose Kerosene (DPK), which can be used as both aviation fuel/Jet- A1 and household Kerosene, known in the technical parlance as (HHK).

    The data has put the Crude Utilisation Unit (CDU) and capacity utilisation in the four refineries at 60.40 per cent.

    Underscoring the utilisation capacity, the PHRC is set to ramp up its operation to about 60 per cent of its 210,000 barrels per day (name plate or initial capacity) and the WRPC will be hitting 80 per cent of its installed 125,000 barrels per day capacity. The development, according to the NNPC, is despite the fact that the Fluid Cracking Catalyic Units (FCCUs) have not been re-streamed.

    The Corporation said: “The Port Harcourt and Warri refineries have been successfully re-streamed after a nine-month  rehabilitation was carried out by its in-house engineers and technicians.”

    Enough evidences abound that the four refineries, which were built with initial capacity of 445,000 barrels of crude oil per day, will soon return to name plate capacity after undergoing  completion repairs in a couple of months.

    The refineries cannot meet the daily consumption requirement of between 40 to 42 million litres of fuel per day yet but their production records had not only beaten the predictions of those who concluded that the plants would never run again in the light of the myriads of problems bedeviling them. Already, industry observers are singing a diffrent tune.

     

    The magic wand

     

    Like others in the past, the sudden recovery of the refineries has raised several questions in the industry. How did it happen? What was the formula used? How did the management revive the refineries within a short time? Were saboteurs actually frustrating the endless Turn Around Maintenance (TAM) that never revived the refineries? How did the Federal Government danced around the problem?

    Successive administrations have sunk billions of the tax payers’ money into the TAM in the last two decades, but the refineries refused to work, forcing the Federal Government to rely on the importation of refined products to meet domestic demand. The importation brought about the involvement of members of the Major Oil Marketers’ Association of Nigeria (MOMAN) in the controversial money-guzzling subsidy regime.

    In 2002, the former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, approached the   Senate Committee on Petroleum (Downstream) with a Federal Government proposal to spend N251 billion (about one billion British pound sterling) to fix the four refineries. Scheduled for the TAM were the refineries in Kaduna, Port Harcourt and Warri in Kaduna, Rivers and Delta states.

    Besides, the huge vote for the TAM, more than $10 billion was said to have been spent money in the last decade on routine maintenance.

    Despite the TAM, the Federal Government continue to subsidise the importation of products to meet growing local needs.

    The subsidy payments, being made to fuel importers, has not only grown overtime, but has eaten deep into the coffers of the government, whose resources has dwindled due the tumbling prices of crude oil at the international market.

    It (subsidy payment) has risen to N1.9 trillion from N300 billion per annum. The scaring figure has not only caused frictions between the Federal Government and MOMAN members but pitted the importers against government.

    The parties are sharply divided over the actual outstanding subsidy payments, a development that has attracted calls on the government to discontinue with the arrangement.

    Of lately, the public and private sector’ operators have been trading blames on the actual cost of subsidising fuel imports into the country. The parties could not agree on the way forward.

    Amid the lingering disagreement,  the unexpected has happened. The refineries are gradually coming back to life. And ever since the refineries began production, not a few Nigerians, especially, stakeholders in the petroleum industry, have been expressing mixed feelings on the issue.

    Some take the gradual return of the refineries to optimum capacity as a new dawn in the troubled industry. Others see it as a step in the right direction for the country that has over the years, relied on importation to meet domestic demands.

     

    No longer business as usual

     

    They all agreed that the refineries have been going through positive re-engineering processes, which will on the long-run, affect the downstream segment of the petroleum industry

    NNPC’s Group Managing Director (GMD), Dr. Emmanuel Ibe Kachikwu, pinned the sudden revival of the refineries to the re-engineering activities put in place by the government.

    He said the issue of re-engineering of the refineries was embedded in the reforms initiated by the President Muhammadu Buhari administration to foster growth in the industry.

    Kachikwu restated the Corporation’s commitment to carry out the reforms to the letter and boost domestic production.

    Speaking at a forum in Lagos, the GMD said the refineries have been re-streamed to increase fuel production and further meet growing demands.

    He, however, said that the refineries are yet to attain optimal capacity, despite efforts to re-stream them.

    According to him, some worn-out components have been changed and the critical units that require intervention, have been fixed in clear demonstration of government’s commitment to make the refineries work optimally.

    President of the local chapter of the International Association of Energy Economics (IAEA) in Nigeria, Prof Wunmi Iledare, agreed with Kachikwu’s views. He said the commitment of the government to local production accounted for  the reactivation of the refineries.

    Iledare believes a good leadership will stimulate the socio-economic development of the country, pointing out that things have started taking shape in the downstream segment of the oil and gas industry, especially the refineries immediately President Muhammad Buhari assumed office on May 29.

    Leadership and vision, he noted, are inseparable ingredients in any economy and that the two must co-habit to promote growth.

    He described as shocking that the refineries on which successive administrations spent fortunes without result, have all started working within three months under the new government.

    His words: “Is the improvement in the production capacity of the refineries a fall out of maintenance activities carried out years ago? No. The growth that is being witnessed in the operation of the refineries is the result of re-engineering activities, embarked upon by the NNPC months ago. The refineries are not just working; they are working because the government took the right steps to fix the problems plaguing their operations.’’

    Iledare, who is a Professor Emeritus at the Centre for Energy Studies, University of Louisiana, United States (U.S.), said the perception of the leader, especially in the oil and gas industry, cannot but play vital roles in achieving the desired results.

    “The public perception of President Buhari’ s government is strong, and everybody is sitting up in order not to incur the wrath of the government”, the professor said.

    Iledare noted that the government has embarked on total cleansing of the ‘Nigerian System’ and the result is evident in the operation of the refineries now.

    He said the refineries are working because the right processes and methodologies were adopted to fix their problems, adding the refineries will return to optimal capacity with the sustenance of the ongoing efforts.

    Also speaking, the Managing Director/Chairman, Mobil Nigeria Plc, Mr. Tunji Oyebanji, said the refineries are coming up amid assurances by the Federal Government to pay the subsidy arrears owed to oil marketers.

    He welcomed the resuscitation of the refineries as timely in view of the perennial fuel shortage and the pressure on the government to embark on full deregulation of the petroleum industry.

    The Mobil oil chief, however, cautioned Nigerians against expecting the refineries to resume full production capacity immediately.

    He said the process of making the refineries to deliver 100 per cent output could not be that simple, because a lot of rehabilitation must be done to achieve such feat.

    Also, the Chief Executive officer, Starways Energy Limited, Oliver Mordi, said there must be more to the sudden recovery of the refineries, noting that previous administrations had tried, without success, to revive them.

    He suggested that a probe should be instituted by the government to unravel the reasons for the poor production output of the refineries in the past.

    According to him, sources within the refineries, claimed local engineers and technicians were used to put the refineries in order.

    Mordi said: “In times past, the NNPC has been engaging Original Equipment Manufacturers (OEM) to carry out major repair of the refineries. The manufacturers, based in the developed economies such as Europe and the U.S. have strong pedigrees in the area of building and installing refineries.

    “Yet, they were unable to fix our refineries. Recently, the manufacturers refused to come to Nigerian, on account of security challenges. As a result of this, the management of the refineries decided to use their workers to re-stream the refineries. ‘’ He said that from all indications, some saboteurs operated within the system to frustrate government efforts.

    Recalling his relationship with the Kaduna refinery, from where he was lifting oil a couple of years back, Mordi said tanker owners contended with loading problems in the KRPC due to certain problems.

    He said the refinery had battled with problems relating to loading and capacity, following allegations that workers have tampered with its operations.

    Mordi, now an energy consultant, said the issue often culminated in long queue at the Kaduna refinery by marketers who patronised the facility for  petroleum products.

    He said marketers were forced to lobbying in such situations to get their quota, adding that the problem is not limited to KRPC.

    Mordi said it was an open-secret that workers were being tipped before they attend to marketers, stressing that such sharp practices may have been shielded from the management.

    He said: “In the course of transacting business with some of the refineries few years ago, I discovered that the corrupt tendencies of workers were high. Cases abound where money exchanged hands between some key employees of the refineries and companies that came to load fuel before they render certain services.

    “Sources within the refineries said something was wrong with the human aspect of the refineries; that aspect might have changed in view of the successes recorded in recent times.”

    Local oil production boosts power supply

    Apart from the milestone recorded in the industry with the gradual return of the refineries to installed capacity, the country is also savouring steady electricity supply.

    Regarded as an albatross that the government and Nigerians have been contending with, the power sector has recorded an improvement.

    With electricity generation increased from 4,515 to 4,545 megawatts (MW) as announced by the Transmission Company of Nigeria (TCN), the country may be set to enjoy uninterrupted supply.

    The Nation discovered that the relative stability being witnessed in power supply could be traced to lack of distruption in the electricity value chain, including regular gas supply, reduced vandalism and upgrade of generation facilities by the new investors.

    Residents of Agbara, Amukoko, Ojo, Sango-Ota, Ikotun, Igando, Olodi Apapa, Isolo, Ajegunle and Ikeja areas, all in Lagos and Ogun states, have being enjoying improved electricity supply.

    Other areas are: the Federal Capital Territory (FCT), Abuja, Akure, Benin, Niger, Port Harcourt and Markurdi.  Residents in the listed communities now enjoy electricity for between four and five hours daily.

    The situation, a marked departure from what obtained in the past, has brought succour to many Nigerians, especially business owners, who look forward to further steady electricity generation and supply.

    Dr Sam Amadi, the Chief Executive Officer (CEO), Nigerian Electricity Regulatory Commission (NERC), said improvement in gas supply and relative stability in power supply across the country, was due to the anti-corruption disposition of the President.

    He said Mr. President has since assuming office on May 29, instilled  discipline that has put every public official on his/her toes,leaving everybody with no option, but to key into the new order.

    Amadi noted that the President has not left anybody in doubt that he has zero tolerance for corruption.

    According to him, investors in the power sector have been told to sit up or shape out, a development he said, was responsible for the supply of gas to the various thermal plants across the land.

    “The bottom line is that there’s a gas supply improvement in the system and partly also because of the zero tolerance for corruption by the present government, people are now sitting up,’’ Amadi said.

    Managing Director, Ikeja Electric (IE), Mr Abiodun Ajifowobaje, said the involvement of private investors in the management of Power Holding Company of Nigeria (PHCN) Plc. assets has boosted electricity generation.

    According to him, the private managers have introduced measures to improve electricity generation and distribution.

    He said Ikeja has moved from a little over 300MW of electricity to 500MW megawatts within a short time.

    According to him, the Distribution Companies (DISCOs) have been coming up with an initiative known as ‘’ Embedded Generation’’ through which a particular area will be designated and given to willing investors, who they will negotiate with to build power plants and sell to people within the locality at a cometitive price, relatively higher than what consumers pay the distribution firm operating in their domain.

    He said the initiative, when properly implemented, will boost electricity supply.

    Spokesman for the Eko Electricity Distribution Company, Mr Godwin Ihemudia, attributed the improvement to the boost in power generation.

    The Group Managing Director, Aiteo Power, Dr. Ramson Owen, also corroborated the position, saying the Buhari administration has recorded some feats in the power and petroleum sector.

    He, however, said that the sustenance of the achievements should be of primary concern to Nigerians.

    But the question begging for answers are: Can Nigeria sustain the progress recorded in the areas of improvement in output of refineries and power supply, taking into consideration the perennial gas supply problems?

     

  • ‘Remove fuel subsidy before devaluation’

    ‘Remove fuel subsidy before devaluation’

    The government has been urged to remove fuel subsidy before it embarks on another devaluation of the naira.

    The Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, who gave the advice at a seminar for finance journalists,  organised by the Central Bank of Nigeria (CBN) in Calabar, the Cross River State capital, said the impact of the devaluation on the economy would be reduced if the government removed the subsidy.

    “Currency adjustment will happen, but depending on when they take away the subsidies, the adjustment required will be minimal. What is required is the exchange rate determining mechanism which allows for a floating currency with interventions to create stability,” he said.

    Rewane insisted that if oil price dropped below the value, the adjustment impact would be higher.

    “The problem of currency adjustment is not unique to Nigeria; all the oil producing countries are all facing the same thing. So, let us not wallow in it. Whether we like it or not, I can assure you that they will get rid of petrol subsidy. Not because of the pricing but because it is a system that is wrong”.

    He said subsidy fuels corruption, adding that the about 40 million litres of petrol consumed daily are exaggerated, adding that the subsidy is either on imported or exported fuel to neighbouring countries or overseas.

    “In 2002, total subsidy paid in this country was N200 million, by 2012 it had gone to N2 trillion, does this mean that we now have 20 times more vehicles in Nigeria, no. We are talking about 40 million litres of petrol a day. Is it that we are driving on top of one another? The true figure should not be more than 10 to 15 million litres,” he said.

    The FDC chief executive also stressed the need to increase productivity in the country, saying: “We must recognise that Nigeria has 2.6 per cent of the world population and produces 0.7 per cent of the world output. We can only desire and lay a claim to a higher quality of life if we can produce more.’’

     

  • How fuel subsidy can be removed, by Dogara

    How fuel subsidy can be removed, by Dogara

    THE only way to remove the contentious fuel subsidy is by amending or repealing the Price Control Act or through an Executive proclamation setting up the Price Control Board, House of Representatives Speaker Yakubu Dogara said yesterday.

    Dogara spoke yesterday when he received the National Executive of the Independent Petroleum Marketers Association of Nigeria (IPMAN) led by its president, Elder Chinedu Okoro.

    He said: “You talked about bringing this product at no cost to the government; that implies to me the removal of subsidy. Now, I have had this discussion on so many platforms, but as a legislator, I can tell you there is something about subsidy removal that we are not looking at.

    “There is a Price Control Act; if you look at the PCA, Section 4 talks about regulating or controlling the prices of products that are listed in the first schedule of that Act. One of the products listed in the first schedule is petroleum products. So, by law in this country, we must control the price of petroleum products.

    “But the law as passed, parliament gives a window, prescribing and vesting the responsibility of adding up items on the schedule of the given items to the Price Control Board. I am not sure we have that board in place.

    “So, for any discussion then to be meaningful, you have to put pressure on the Executive. It is not the legislative work to constitute the board.

    “The board has to be put in place in line with the provisions of that law. So, as soon as the board is constituted, the members of the board can remove petroleum product from the schedule of the Act. In that way, subsidy is gone.

    “But in the absence of that, the only other alternative is for the NASS to amend the Act and remove petroleum products as one of the products in the schedule to the Act, or repeal the Act all together.

    “These are the only two avenues by which subsidy can lawfully be removed. Any other way will be ultra vires in abolishing subsidy; that is the truth.

    “The PCA  has clearly stated how subsidy can be removed and if this is the only thing you can achieve, to quickly talk to the executive so that they can constitute this board; let the board commence the right action in that direction.”

    Dogara described as “illegal”, the situation in which finished products are imported into the country.

    “I don’t know if there is any country that produces the kind of oil that is produced in Nigeria that refines outside its products. For me, it is kind of illegal. This is most inexcusable because we have turned this nation into a laughing stock.”Why is it that we can’t refine this oil here? Why is it that in an oil producing country, our brothers and sisters have to queue for nine hours to buy a product that should just be there?  This is something that I believe that with your expertise you need to leverage on.

    The IPMAN president said there was need for government to seriously consider a swap agreement in which the association would receive crude and supply the country with refined products without collecting any subsidy.

    This, he said, would save the country the foreign exchange.

    Okoro claimed that IPMAN in conjunction with its partners from Peru, are to inject $4 billion into two refineries – one each in Bayelsa and Kogi states.

    The two refineries will each have a capacity of 200,000 barrels per day, he said.

  • How to remove fuel subsidy – Dogara

    How to remove fuel subsidy – Dogara

    The Speaker of the House of Representatives, Yakubu Dogara has said the only way to remove the contentious fuel subsidy is by amending or repealing the Price Control Act or the executive proclamation setting up of the Price Control Board.

    Dogara spoke while receiving the National Executive of the Independent Petroleum Marketers Association of Nigeria (IPMAN) led by its president Elder Chinedu Okoro, on Monday.

    He said: “You talked about bringing this product at no cost to the government, that implies to me the removal of subsidy. Now, I have had this discussion several platforms, but as a legislature, I can tell you there is something about subsidy removal that we are not looking at.

    “There is a price control act, if you look at the PCA, Section 4 talks about regulating or controlling the prices of products that are listed in the first schedule of that act. One of the products listed in the first schedule is petroleum products, so by law in this country, we must control the price of petroleum products.

    “But the law as passed by parliament gives a window, prescribing and vesting the responsibility of adding up items on the schedule of the given items to the Price Control Board, and I am not sure we have that board in place.

    “So for any discussion then to be meaningful, you have to put pressure on the executive. it is not the legislative work to constitute the board.

    “The board has to be put in place in line with the provisions of that law. So as soon as the board is constituted, the members of the board can remove petroleum products from the schedule of the act, in that way, subsidy is gone.”

     

  • NLC leader: Fuel subsidy is a scam

    NLC leader: Fuel subsidy is a scam

    Though he leads a troubled house, Nigeria Labour Congress (NLC) President Comrade Ayuba Wabba does not allow that to affect his vision for the congress. According to him, labour must regain its bite to live up to its billing as workers’ representative.  In this interview with TOBA AGBOOLA, the  comrade-presidentspeaks on a wide range of issues, including the economy, perennial fuel scarcity, subsidy and restructuring of parastatals. 

     

    How is labour contending with the high rate of unemployment and naira devaluation, among other issues?

    First, we are aware of the daunting challenges, especially in our economy and in our social life which have brought a lot of dislocation to our members. We are obviously aware of that and part of our responsibility is to effectively respond to some of these challenges so that our immediate constituency and the larger society would not be at the receiving end of those policies.

    It is true that our currency has been devalued over time due to the fallen price of crude oil which is our major source of revenue, and this has also affected the revenue accruing to government. This has invariably affected the provision of social services and developmental processes. We are mindful of this that is why for every challenge in life, there must be an alternative solution.

    As I said at an earlier event, we have constituted a committee of experts that is working on alternatives to some of these challenges; in fact the report is ready.

    What is labour’s position on petroleum products pricing and the perennial fuel scarcity?

    Yes, incessant increases in the pump price of petrol have been with us for over three or four decades. I am not sure the argument has changed, from what I used to know in the 80s, that has been advanced as reason for shortage or hike in the cost.

    Therefore, it is an irony and it should be a concern to all of us that despite the fact that we are one of the Organisation of Petroleum Exporting Countries (OPEC) that God has blessed enormously with this resource, the issue of managing it has become a problem. First, our inability to refine petroleum products for our domestic use, 40 years down the line, is an issue of mismanagement.

    Recently, I read about a proposition made by the Independent Petroleum Marketers Association of Nigeria (IPMAN), because they are also part of the problem and they have said, yes the subsidy issue is false. They have said that clearly and that they are now ready to buy crude products, refine them outside the country and bring them back even at a lower price.

    Those are issues and information that would interest all of us.

    You’ve just mentioned fuel subsidy. What is your take on it?

    It has been established over time that the issue of subsidy in Nigeria is false. Months before the election, those issues came into play. You remember before Yar’Adua came in, this issue came to play because it’s the same money they use to prosecute the agenda of the election.

    Now preceding the 2015 elections, the same issue had come to play, it’s for us Nigerians to unite in one force and agree. In fact in my view, the issue of subsidy is even questionable, that we need to first interrogate and agree if there is subsidy or not. That case needs to be established, but in the interim I agree with you, Nigerians should not be allowed to suffer and therefore the new government must of necessity put up their thinking cap and see how in the short-term, we will get out of this quagmire.

    Government must make fuel available at a price that is reasonable, so that Nigerians will not be made to suffer the ills of the system. No doubt this is not about few marketers who have taken all of us for granted. In that recent press release issued by IPMAN, they claimed that there is no subsidy anywhere and therefore this claim, or request for over N200 billion, doesn’t exist. Therefore it’s a scam and I think that should be a concern to all of us.

    What action are you contemplating in response to the matter?

    As organised labour, we will be willing to confront these issues headlong. In fact, we are going to revive our monthly discussion and interaction on major policy issues where we will bring experts to debate and that will allow us to have a firm position on how to respond to these issues, but I think what is playing out is also good for us.

    The information clearly will make any government that wants to take any hasty decision to be weary of the fact that the issue of subsidy is a scam and therefore that issue must be addressed first, before you think of either removal of subsidy or not.

    In fact, the information we have, goes beyond lamentations, because in some of the instances we were told even the ones we refine locally, what they do is to put them on ship and come back and say they are imported products and therefore you should pay subsidy on them. So what are you talking about subsidy, it’s just about rhetorics. People are using the rhetoric of subsidy to confuse all of us and continue to benefit from a system that is not working.

    It’s for all of us to come together and agree and give direction that this issue should not continue, few people should not continue to benefit from the system to the detriment of all of us because its artificial scarcity. Why is it that when you go to the outskirts of town, you find fuel?

    So it’s not about unavailability, no, it’s about people also taking us for granted, the fuel is available. A guy that I was interrogating when I saw the government’s response, said they have sufficient strategic reserves. The first statement we asked is whether we have now abandoned the issue of having strategic reserve, they said they have products in abundance; therefore the issue is few marketers holding all of us to ransom.

    Government must find the will to address the issue squarely, what may be delaying our engagement is because you need those key principal officers of government to be on board so that you can engage them. You can’t engage ghosts because for now there are no structures in place. So who do you engage?

    We don’t also want a situation where our action would also compound the issue and bring more hardship to Nigerians, so the issue of withdrawal of services certainly will not be an option.

    The issue is how you confront these challenges headlong to bring about solution; those are the challenges and I am sure we are ready to tackle them.

    From the team we have at NLC now, when you talk of experience, various sectors and key unions that are actually solid, not those that are standing on one leg, we have them in good number to galvanise whatever support we require from Nigerian workers to be able to respond to whatever policy that is being churned out.

    There are indications that this administration may take drastic measures, such as merger of parastatals, to streamline the civil service. This might result in job losses, how will you handle the challenge when it crops up?

    The issue of merger of parastatals, we have made our position very clear because to me that would also be a contradiction to the policy of this present government. They have promised to create three million jobs annually through public works and therefore it will be a contradiction for you to make people to lose their jobs while on the other hand you are trying to create jobs.

    Our employment market in Nigeria is saturated because there is no worker today that would not have more than 10 dependants. I as a person, I know I have more than 10 dependants, or people that have graduated but they are not employed so they depend on me for their means of livelihood. Once you take away that, you are also compounding the social security system in our country. That will not be a better option.

    Secondly, it will also be at a cost because any worker you are severing, you don’t only pay his benefit, you also pay him severance package, so that will be a cost and am not sure they have counted the cost, it’s still mere speculation and we are going to advance these reasons to defend such issues.

    You are aware of the issue of the National Identity Management Commission (NIMC), they have disengaged over 4000 staff, three years down the line, no worker has been paid. In fact part of our engagement is also to engage the process; we have already given them a notice that we will also engage the process and seal off that place, government must find money to pay those workers because it’s not their making for them to be exited from service. They have families to feed, they have worked for a period of years, they are entitled to their benefits but these benefits have not been paid.

    We are not in a jungle, therefore those are issue that am sure cannot fly when we put it side-by-side the facts of the issue. Why do you think the implementation has been delayed till now, it’s because there are a lot of intricacies in it, that is why even the government that set up the committee couldn’t implement the report till date, so I think that is one of the murky areas that should be addressed and government should be very cautious in implementing such reports, we are not the problem.

    Workplace improvement seemed to be the focal point of this year’s International Labour Oganisation (ILO) conference. Tell us how labour centres in Nigeria contributed to discussions at the 104th ILO conference?

    Globally, labour has a standard and part of why we are here is to look at what is the global best practice in terms of decent work agenda, in terms of occupational health and safety, remuneration, application of standards even in terms of collective bargaining.

    That is why we have ILO conventions specifically 87 and 98 which set standards for how labour issues will be discussed, so part of why we are here is to align ourselves to the best global practice in terms of responding to some of those challenges and therefore it’s not a wasted effort for all of us to be here.

    What was your major focus or area of interest at the just concluded ILO conference ?

    We are here to sharpen our skill and also fit into the global system of managing labour and Industrial Relation issues. So basically we are beneficiaries of these process and it’s also a tripartite system where you have employers and the government participating in this process and therefore all of us must conform ourselves to what we refer to as international global practice in labour and trade union administration.

    So part of our take home from here, you also realise that most of our members have participated actively in all the four committees. For instance, I have participated effectively in the Committee on Application of Standard. We have made several interventions.

    I know some of them have participated on the Committee on SMEs; the one on the Formalisation on the Informal Economy and that of Social Protection.

    One issue we can take home from here is the fact that we have sharpened our skills to engage those challenges, because we are not also isolated as Nigeria. Those challenges facing the global economy are also what affect other countries.

    In the same global world, some other countries are talking of reviewing their wages because they also need to empower the workers, those are some of the take home for us and they advanced good reasons why that should take place, because those issues are global issues. What drives development across the world is the labour component.

    Labour creates the wealth through industrialisation and therefore those are issues. As a country we need to queue into that if our quest for development and transformation is anything to go by.

    We must then go back to the basis of creating that wealth through meaningful employment and through making our industries, and work by industrialisation policies.

    Those are some of our take home from this ILO conference and certainly it’s going to give us an edge in addressing some of these challenges.

    How do you intend to return labour movement to its glorious era, given your campaign promise of returning to the founding principles of the movement?

    I think we have actually tried to capture the challenges; there is no gain saying the fact that in terms of prestige, there is drastic change in the way workers perceive NLC over the past few years. This is basically because of the fact that we have not been able to engage a lot of policy issues that have direct bearing on the well-being and welfare of workers and even the citizenry. This substantially has affected our prestige before our members and I think as a member of a very reputable union, this is not an issue we can just gloss over, it is a challenge. When you look at the issue of the economy, I think over the past decades, we have been on top of it, there is no economic issue government will contemplate that NLC has not had its own position whether for or against such policy.

    We are going back to this basic, that is, our founding principle which is to represent only the interest of the workers. And I think for me, this is very key for us to earn the confidence of the workers because once you earn their confidence, you are also able to earn the confidence of the employers. So we are saying that once you make a pronouncement you must be able to back it up with action and see to the conclusion of the issues.

    We are returning to the basics where the interest and only the interest of the workers will dominate our engagement with the government and even form the cords and basis of interactions with other social partners. The area I intend to galvanise and bring back, is the biting and confrontational aspect of the labour movement which is lacking now, when you make pronouncement, you must back it up with necessary action. We have responsibility to bring back the labour culture of representing the Nigerian workers.

     

     

  • Council to FG: Take a stand on fuel subsidy

    Council to FG: Take a stand on fuel subsidy

    The National Executive Council (NEC) of the Senior Staff Association of Communications, Transport and Corporations (SSACTAC) has called on the federal government to take a firm position on fuel subsidy.

    It also tasked the federal government to ensure the country has functional refineries to abrogate revenue wastage and mismanagement.

    In a communiqué yesterday by its President General, Comrade Muhammed Yunusa, SSACTAC said at the end of its NEC meeting it was high time the nation put an end to mass importation of fuel.

    It said: “There is urgent need to end this backwardness. The federal government is therefore urged to take a firm position on the fuel subsidy issue to the extent that the obvious revenue wastages are stopped, ensure that the country has functional refineries so that the regime of mass importation of fuel ends.”

    SSACTAC challenged the new administration to keep fate with its promises to better lots of the people.

     

  • Stakeholders for talks on fuel subsidy

    Stakeholders and various professionals will converge on Lagos on Friday to discuss the controversial issue of fuel subsidy.

    The roundtable, tagged: “Fuel Subsidy: A Closer Look”, will be held at the Auditorium of the Centre for International Advanced and Professional Studies (CIAPS).

    Speakers and panelist will include Mobolaji Aluko, Henry Boyo, Tosin Adeyanju and Anthony Kila.

    Discussants at the event will analyse past and future of fuel subsidy, its effect on the country and its relation to fuel scarcity.

    Also expected to participate at the parley are legislators from various political parties, non-governmental organisations and the public.

    The roundtable is a CIAPS event managed by selected students of Media and Journalism led by Fatima Melissa Turay, Charity Azubike, Shimatever Sunday and Omolara Abioye as part of their professional training.

    In a statement by Fatima Melissa Turay, CIAPS Centre Director Prof. Anthony Kila stated that “the event is part of CIAPS’ effort to help understand and improve the country we live and operate in”.

  • Fuel subsidy for whom?

    How much is the official cost of a litre of fuel? I am forced to ask this question which every Nigerian knows the answer to because my experience in the last two weeks has left me wondering if there is still a basis to claim there is an official price for the prized commodity.

    Instead of the official price of N87 per liter, the cheapest I have bought a litre in recent weeks is N100 a few times, while I have most times paid N120-N140. At the height of my desperation to avoid being stranded in the office, I bought a litre for N500. I am told some paid more than this unbelievable amount when they had no other option.

    I guess I and others who have been buying fuel at the exorbitant cost should be blamed like a petrol attendant told me. If we don’t buy the expensive fuel, the attendant said his manager will not be encouraged to ask him to sell at the price he admitted is too high for a litre of fuel.

    The attendant is right. If we don’t buy the expensive fuel, marketers would not drink it as I argued at a station where an attendant claimed he was doing us a favour by selling fuel when other stations were closed.

    I told other motorists who were prevailing on me to pay the extra N100 charge by the attendant for selling into a keg that it was wrong to do so since the oil marketers will still claim the subsidy for the fuel being sold to us at more than the official price.

    But who is to blame? I and others who need fuel to go to work, our business and other important appointments and can’t afford to stay for hours on long queues at petrol stations that have fuel to sell at relatively cheaper rate or successive governments in the country which have mismanaged the oil sector?

    How do we justify that we are an oil producing country yet we don’t have any functioning refinery and we have to import fuel at rates which have to be subsidized by the government?

    Despite report s of agreement reached with oil marketers to begin lifting of fuel from major depots while the disagreement over the actual amount being owed is resolved, each fuel station has been selling at their preferred rate instead of the official price.

    Not even threats by the Directorates of Petroleum Resources to clamp down on stations that sell beyond the official price has stopped many oil marketers from exploiting the scarcity to milk desperate fuel seekers like me.

    Black market fuel sellers and other individuals have also taken advantage of the situation to sell at incredible prices while law enforcement agencies watch helplessly or as alleged in some quarters connive with them to get their own cut of the profit.

    In the desperation to buy fuel, some have bought adulterated ones which have damaged car engines.

    As it is, there seem to be no indication when the scarcity will be over. The government has lost control over enforcement of sale of fuel at official price and the oil marketers are determined to keep selling at the price that suits them.

    Instead of subjecting Nigerians to endless hardship of the scarcity, the government should once and for all remove the so called subsidy on fuel and allow market forces determine how much to sell.

    We are already getting used to buying at different rates from various stations. For those outside Lagos and major capital cities, buying fuel at more than the official price is not new.

    The controversial amount being paid to oil marketers can be channeled to improving on many other infrastructural facilities which will reduce cost of transportation and reduce the need for everybody to keep their cars on the road.

    As soon as possible the new federal government will have to give priority to reviving the old refineries and possibly build a new one but for now we have to do away with the so-called subsidy.

  • Ubah to Fed Govt: remove fuel subsidy

    •Says oil marketers must be probed

    The Managing Director of Capital Oil, Mr. Ifeanyi Ubah, has called on President  Muhammadu Buhari to remove fuel subsidy and probe the marketers responsible for the shutdown that culminated in the biting fuel scarcity that is just easing.

    Speaking with journalists in Abuja at the weekend, Ubah wondered why the Federal Government should  keep paying subsidy while  the citizens are not benefiting from the scheme.

    He asked the President to deregulate the oil and gas sector, noting that the deregulation would bring down fuel price drastically.

    His words:  “I urge President Buhari to take a bold step and deregulate the oil sector. He is not a stranger to the sector, having being a former minister of Petroleum.

    “He will be respected for taking the step. There’s no point paying subsidy when Nigerians are not benefiting from  it. The president will be doing the right thing if he deregulated the sector  so that the product will be sold at cheaper rate in the future.”

    Insisting that deregulation will bring down corruption, Ubah said it was unfortunate that the citizenry never bought the idea from former President Goodluck Jonathan.

    Ubah, who confirmed that the Federal Government owes petroleum marketers, said they did not properly handle their agitation for the payment.

    He said: “If marketers’ action is not investigated and controlled, there may be a repeat of a similar energy crisis in the country”.

    He added: “Indeed the marketers are being owed large sums of money and I am one of those being owed. But I believe that dialogue should have been the choice of the marketers, especially considering the state of the nation.

    “It was unprecedented in the country for oil marketers to go on strike for up to four days and what I expected was a warning strike before a total shutdown.

    “It was unpatriotic for them to shut down the country. If this is not properly investigated, there could be a repeat of such action. Marketers should know that they are not labour unions. There was an agreement with government to pay them gradually. But they disregarded the agreement and unpatriotically threw the country into crisis.”

    Ubah sid he pulled out of the oil marketers’ strike because his company was not consulted before the marketers decided to shut down operations.

    He said: “My facilities store products for the Pipelines and Petroleum Marketing Company (PPMC), an arm of the Nigerian National Petroleum Corporation (NNPC), which means such products belong to the Federal Government.

    “For a facility like ours, we should be considered before taking this position. What if people storing product in our facilities sue us? They have the right to take their products. What if PPMC sue us or cancel our contract? We need to ask these questions,” the Capital Oil boss said.

    Ubah said he decided to resume fuel supply because he could not bear the horror of the citizens dying in hospitals and banks shutting down, and consequently, putting the masses in hardship.