By Onyebuchi Ezigbo
The federal government and organised labour will reconvene on February 22, 2021 for the consideration of the reports of their bipartite technical committees on fuel price and electricity tariff.
One of the major recommendations of the committee is to ensure the Nigeria Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) collect their charges in naira to reduce pressure on forex demand and pump price hike.
The Minister of Labour and Employment, Senator Chris Ngige, disclosed this Monday night while briefing journalists after a bipartite meeting between the federal government and the organised labour at the Banquet Hall of the Presidential Villa Abuja.
Ngige said the meeting received and adopted the report of the Technical Committee on Premium Motor Spirit (PMS) Pricing Framework, while that of the Electricity Tariff Committee was expected in a week’s time.
Speaking on the outcome of the discussion, Ngige said that the organised labour has requested for some time to enable it subject the report on PMS pricing to their organs for further investigation.
“It is a technical report, so they needed further investigation of the report by their own technical research team. The Technical Committee on electricity tariff has not finished. We expect the report in a week’s time. So, cogently, we are reconvening on 22nd of this month to take both reports,” the minister said.
The report of the Technical Committee on PMS Pricing was presented at the meeting by the Chairman of the Committee, Onochie Anyaoku, a former Executive Director, Refineries Operation and Petrol Pricing in the Nigerian National Petroleum Corporation (NNPC).
According to Anyaoku, the report is 100 per cent owned by the membership of the technical committee and they have all endorsed it.
He recalled that the terms of reference, jointly agreed on by the bipartite parties included to review the cost of supply and incidental commercial costs of PMS and arrive at the basis of determining market reflective pump price gap under the template of the PPPRA Act, to engage all relevant stakeholders to establish the price review framework and to carry out any other assignment that will facilitate the work of the committee.
He said the committee at its meeting on December 16 developed guiding principles and a work schedule, technical and distinct from the primary function of PPPRA, to develop a transparent methodology and a template that will serve as the guide on realistic petrol pump price and benchmark all pricing elements of the PMS pricing template, with neighbouring countries.
“The comparison shall cover all fixed and variable components of PMS pricing bureau. Existing PPPRA template to serve as a baseline template and new additions of template incidental cost where appropriate shall be sufficiently justified.
“It is important to point out that we tried not to add. We tried to interrogate and most importantly, we tried not to add any inefficiencies of the delivery logistics of PMS to the public. So, basically, we interrogated every line item on the PPRA template.
“I must point out that the Act establishing PPPRA is very comprehensive and very inclusive, if implemented as intended. I must also show here that the import base of PMS, essentially places very narrow latitude for cost reduction in price determination,” he said.
Anyaoku said that based on extensive review of the pricing framework and in line with the terms of reference of the committee, the committee made some recommendations.
Among the recommendations are that: “PPPRA should convene periodic meetings with PPMC and other importers to ensure actual cost of supply reflective determination as an interim solution and that NLC, TUC, PENGASSAN and NUPENG should witness the transparent determination at the periodic meeting.”
It recommended that PPPRA should frequently monitor data of Rotterdam supply chain values.
“This should continue to form the basis of price determination until the West African basket is liquid and transparent enough to warrant its adoption in the pricing template.
“All importers including NNPC to adopt the same forex window used by PPPRA to ensure alignment and accurate pricing. PPRA board to adopt weighted average as the basis of determination.
“Government to enforce immediate collection of NPA and NIMASA charges in naira to reduce pressure on forex demand and pump price hike,” it said.
Another proposal by the committee is that the federal government should develop “adequate communication strategy on the necessity of deregulation and the benefit to the people, to create public awareness and gain acceptability of deregulation, which will reduce the pressure on labour to react to fuel increase”.
The committee said that deregulation is highly desirable at the present stage of Nigeria’s development but that its implementation requires trust building steps and commitment to visible frugal spending by the government.
It said that there should be intensive and sustained communication between government and stakeholders, which is mandatory, to reassure citizens whenever there is price change, especially in upward trajectory.
“Government should consider certain projects targeted at winning the confidence of Nigerians on the key benefits of deregulation,” it said.
The Report of the Technical Committee on PMS Pricing Framework was an offshoot of the ongoing bipartite engagement between the federal government and the organised labour unions.
The membership of the committee include the representatives of NLC, TUC, NUPENG, PENGASSON, PPPRA, PEF, Federal Ministry of Finance, Budget and Planning as well as Federal Ministry of Labour and Employment.