The Nigeria Labour Congress (NLC) on Thursday warned the Federal Government against heeding the World Bank’s recommendation to increase the pump price of Premium Motor Spirit, commonly known as petrol, to N750 per litre.
The Head of Information at NLC, Benson Upah, said in an interview with Punch that any further escalation in petrol prices could result in chaos within the country.
NLC urged the government to reject the World Bank’s proposal of pricing petrol at approximately N750 per litre, advocating for maintaining the current rate of between N620 and N650 per litre in most locations across the nation.
Simultaneously, oil marketers clarified that the cost of PMS would be around N1,000 per litre if the government did not subsidize the product.
However, the government refuted these claims on Thursday, rejecting both the assertions of marketers and the World Bank regarding the reintroduction of subsidy on petrol in Nigeria.
In a statement on Wednesday, the World Bank called on the Federal Government to cease subsidy payments on petrol and increase the product’s cost to N750 per litre.
The World Bank argued that the subsidy might still be in effect, as current fuel prices in Nigeria did not reflect the actual costs.
Alex Sienaert, the World Bank’s lead economist for Nigeria, alleged the continuous payment of petrol subsidy by the government in Abuja during the presentation of the Nigeria Development Update, December 2023 Edition.
“It does seem like petrol prices are not fully adjusting to market conditions.
So, that hints at the partial return of the subsidy if we estimate what is the cost reflective of the retail PMS price of the would-be and assume that importation is done at the official FX rate.
“Of course, the liberalisation is happening with the parallel rates, which is the main supplier, the price would be even higher.
These are just estimates to give you a sense of what cost-reflective pricing most likely looks like.
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“We think the price of petrol should be around N750/litre more than the N650/litre currently paid by Nigerians,” he stated.
In NLC response to the World Bank’s statement, the labor movement asserted that any additional increase in fuel prices would inevitably lead to chaos.
Upah, the Head of Information for the NLC, characterized the World Bank as a predatory institution indifferent to the well-being of Nigerians.
NLC emphasized that the initial rise in the pump price of PMS had already created significant challenges in Nigeria.
“The World Bank is globalist north in thoughts and actions and has little or no consideration for the global south. It is a predatory institution that the global north uses to justify its crimes against the south. NLC staff said.
“It is almost single-handedly responsible for the ruination of the economies of countries of the global south for which it prescribes one solution for all ailments.
“It does not care what happens to Nigeria or Nigerians so it could from its perch in Washington say whatever it likes or push around our leaders like house-helps.
“The truth, however, remains that the present regime of the pump price of PMS has all but destroyed the country. To now ask the government to raise it to N750/litre is to invite anarchy upon the land.
“The World Bank is so hypocritical it fails to see the nexus between price and capacity. The minimum wage in Nigeria for a privileged few is N30,000. The same minimum wage in the United States where the law is enforced is N1.5m.
“In light of this, if the government knows what is good for it, it should ignore the World Bank but must remain committed to fighting inherent corruption in the downstream sector of the petroleum industry. It must also cut down the high cost of governance.” NLC said.
The World Bank’s assertions regarding the ongoing fuel subsidy payments for petrol were refuted by the Federal Government.
In a Thursday interview on Channels Television, Minister of Information and National Orientation, Mohammed Idris, stated that Bola Tinubu had unequivocally declared from his inaugural day in office that his administration would not maintain the subsidy on petrol.
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Idris emphasized that the elimination of the petrol subsidy resulted in a notable upswing in the revenue flowing into the Federation Account.
“Subsidy is gone. It is because subsidy has gone that we have so much money available for the government to do so many things. Of course, it’s never enough, but fuel subsidy is gone and it’s gone for good,” the minister stated.
He added, “There are instances where the government needs to come in to see that things don’t go so bad. That’s the responsibility of the government. Every rule will also have its self-adjusting mechanism, but I can assure Nigerians that the subsidy is gone.
“If you look at the monies accruing to the Federation Account and the kind of money the states are receiving, you would know that everybody desires that subsidy should go. What do we do with that subsidy, I think, is the next question. We need to scrutinise that so that Nigerians would benefit from the subsidy that has been taken away. Subsidy is gone.”
Reacting to the Federal Government’s claim that the petrol subsidy had been removed, Chief John Kekeocha, the National Secretary of the Independent Petroleum Marketers Association of Nigeria, contradicted this statement.
Kekeocha asserted that the government was apprehensive about potential unrest if the subsidy were indeed eliminated.
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“It is funny when government personnel who don’t know the realities on the ground come to the open and mess the government up. How can you say that subsidy is gone? No reasonable person who knows the dynamics of the market globally will say that.
“As we speak, a pound is about N1,480 or more, and a dollar is about N1,200 or more. So what is the magic to use and say subsidy on PMS is gone? The government is subsidising PMS because if it gets to N1,000/litre the country could be set on fire.
“So the government is apprehensive. Just like I keep saying, the things they ought to have done before the removal of subsidy on petrol, were not done. They are now beginning to sit with organisations and try to know what they ought to have done.
“So no reasonable government personnel who knows the politics or dynamics of the downstream oil sector would come out and say subsidy has been removed. There is a subsidy, the government is subsidising the product which is why you can see fuel at N650/litre,” he stated.
“It is funny when government personnel who don’t know the realities on the ground come to the open and mess the government up. How can you say that subsidy is gone? No reasonable person who knows the dynamics of the market globally will say that.
“As we speak, a pound is about N1,480 or more, and a dollar is about N1,200 or more. So what is the magic to use and say subsidy on PMS is gone? The government is subsidising PMS because if it gets to N1,000/litre the country could be set on fire.
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“So the government is apprehensive. Just like I keep saying, the things they ought to have done before the removal of subsidy on petrol, were not done. They are now beginning to sit with organisations and try to know what they ought to have done.
“So no reasonable government personnel who knows the politics or dynamics of the downstream oil sector would come out and say subsidy has been removed. There is a subsidy, the government is subsidising the product which is why you can see fuel at N650/litre,” he stated. #NLC