Until domestic refining capacity improves, NLC warns against fuel subsidy removal

The Nigerian Labour Congress (NLC) may be against fuel subsidy removal – following a statement warning the Petroleum Products Pricing Regulatory Agency (PPPRA) not to remove price cap on the premium motor spirit (PMS) otherwise called petrol until domestic refining capacity improves.

In a letter signed by Dr Peter Ozo-Eson, addressed to the Executive Secretary of PPPRA, Abdulkadir Saidu Umar, and made available to newsmen on Monday, 8th June, 2020, the labour union said it was surprised that PPPRA announced the removal of a price cap on petrol without consulting and approval of the board.

Dr Ozo-Eson stated in the letter that “As a member of the Board of PPPRA, at no stage did we discuss a cap-less pricing scheme for petroleum products. While we were open to an objective review of some of the underlying cost on the template such as increased labour costs associated with the new national minimum wage and other realities, it became obvious that marketers and some other operators were seeking an across the board upward review to ensure that prices were kept artificially high.

“In economies, where there are strong anti-trust and anti-collusion laws and enforcement, these acts will be subjects of criminal proceedings. We need strong regulation to protect the masses, particularly in the absence of a strong consumer association to counteract the power of the oligopolistic marketers.”

He argued that It is in the need for this that the PPPRA was established. He said the agency must rise up to provide this need or cease to exist.

“The oligopolies in the oil industry have had their knees on the neck of ordinary Nigerians for too long. It is time to demand that they remove their knees from our neck! For long they have had their knee on our necks in respect of diesel. We are having difficulty in breathing. Your policy on PMS will place their two crushing knees permanently on the necks of poor Nigerians and the Nigerian economy.

“Please, please, please, we cannot breathe! The exploitative opportunities in the case of PMS will be much graver than those of diesel, given the more pervasive use and the lower price elasticity of demand of the former. Unregulated pricing, in an import-based regime, will be at the expense of the consumers,” he said.https://tpc.googlesyndication.com/safeframe/1-0-37/html/container.html?n=0

He called on PPPRA to withdraw the circular and, in consultation with the chairman, call an urgent meeting of the Board to discuss the issues.