Kyari: Tinubu Has Directed Palliatives Be Put in Place to Cushion Effect of Subsidy Removal

·     Insists petrol prices not fixed, will continue to be determined by market forces

·     NLC mobilises for action against fuel price adjustment

·     To hold emergency NEC meeting today

·     Lawmakers urge FG to suspend DSDP contracts

·     Civil society groups protest, block major roads in Edo

·     Removal of petrol subsidy must not fuel poverty, Amnesty International advises

·     Don’t be distracted by antics of labour leaders, oil marketers, northern group tells FG

Chuks Okocha, Onyebuchi Ezigbo, Adedayo Akinwale, Kingsley Nwezeh, Udora Orizu in Abuja, Nume Ekeghe in Lagos, and Adibe Emenyonu in Benin City

As public outcry over the sudden hike in the pump price of petrol continues, Group Chief Executive Officer (GCEO) of Nigerian National Petroleum Company (NNPC) Limited, Mr. Mele Kyari, says President Bola Tinubu has directed that palliatives be put in place to cushion the effect of the increase on Nigerians. Kyari disclosed this yesterday while fielding questions from journalists at the end of a closed-door meeting with members of the National Working Committee (NWC) of the governing All Progressives Congress (APC) at the party’s national secretariat in Abuja.

On same day, Kyari said during an interview on ARISE News Channel that the adjustment in petrol pump price was not fixed. He stressed that prices would continue to change in reaction to market forces in the coming weeks.

But organised labour, under the aegis of Nigeria Labour Congress (NLC), said it was still weighing the situation in the aftermath of the petrol price increment. NLC said it would not hesitate to take all necessary actions within the ambit of the law to protect the interest of Nigerian workers and the masses.

NLC disclosed that as part of moves to galvanise action against the government policy, the union would hold an emergency National Executive Council (NEC) meeting today in Abuja, to decide on appropriate steps to take over the massive increase in fuel price.

In Edo State, Edo Civil Society Organisations (EDOCSO), yesterday, blocked a section of the busy Benin/Lagos highway in protest against the increase in petrol pump price. The protest, which also took place at different locations in the state, obstructed vehicular movement.

However, the Coalition of Northern Groups (CNG) called on the federal government not to be distracted by the tricks of those it described as discredited self-serving labour leaders and unscrupulous oil marketers who would seize every opportunity to undermine government’s good intentions.

But global human rights body, Amnesty International, advised that the removal of fuel subsidy must not exacerbate poverty in the country.

The House of Representatives at plenary yesterday, stated that with the petroleum subsidy removal, the federal government should forthwith suspend all Direct Sales Direct Purchase (DSDP) contracts. The House said NNPC should act according to the provisions of the Petroleum Industry Act (PIA) in order to ensure that the country was not short-changed in production, lifting, and sale of crude.

NNPC had on Wednesday adjusted the pump price of petrol by nearly 200 per cent, from N195 per litre to between N488 and N557 nationwide. The development followed the announcement by Tinubu during his inaugural address on Monday that fuel subsidy was “gone”. Tinubu promised to re-channel the expected savings to education, health and other sectors.

NLC had expressed displeasure over the new pricing template, describing it as vexatious.

Furthermore, Kyari, while speaking with the APC NWC members, noted that NNPC could not continue to be the sole importer of petrol in the country.

The GCEO said, “There is a gradual process now of making a flexible and single exchange rate regime. Everyone will be able to have access to foreign exchange and there is a transition going on now and the NNPC cannot continue to be the sole importer. We know that this is going to vanish and the market will stabilise this.”

On the rehabilitation of the four national refineries, Kyari said, “There is an on-going process of rehabilitation and one of the refineries will come on stream this year. The second will come on stream next year and the third will come in 2025.”

The NNPC boss said it was very obvious that the country could no longer afford the subsidy payment and it had to be removed.

According to him, “Subsidy bills have piled up. The country is not able to settle NNPC for the money we are spending on the subsidy. Therefore, pricing this petroleum at the market is the right thing to do at this time. We believe that this will benefit the overall country in the long run. 

“I am aware that Mr. President has directed some engagement and some palliative will be put in place and I am very sure this will happen.”

Kyari pointed out that there was provision for subsidy in 2022. However, he said in 2023, not a single naira was provided for the purpose of financing the subsidy.

Kyari stated, “And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8 trillion that the federation should have given back to the NNPC.

“For any company, when you have negative N2.8 trillion, there is no company in the whole of Africa that will lend to you. You cannot have receivables. The provision of subsidy is there but absolutely there is no funding for it. It means it is only on paper. So, it doesn’t exist.

“So, we no longer can bear it because of liquidity. If we continue we will run into defaults and the defaults of NNPC is the default of Nigeria. Once NNPC goes into defaults and liquidity, it affects every borrowing done by the country, even the sub-nationals. Your lenders will come back to you and say your country can no longer pay.”

Kyari disclosed that when Tinubu announced that subsidy was gone, within 24 hours, investors in both the money and capital markets reacted positively.

He stated, “It is nothing else other than the statement around subsidy and balancing of the forex market. These two elements are major concerns that every investor all over the world, every partner that we have, is worried about. What is your forex regime and how do you deal with your subsidy? 

“They know that this subsidy constitutes a huge amount of money and this country may not be able to survive and pay its debts. It is very clear that everybody understands this. 

“Before today, the average subsidy level was N400 billion every month. That means every month you can do one major capital project from money that you do not have. This is really is what it means. There is nothing anybody can do about it. There is this common argument that the masses will suffer. That we are going to have problems with them. I agree that once you increase prices of this proportion, as it has happened, it will have impact on inflation. There is no doubt about it. It is very typical also, it goes up and down. The market determines what happens next.”

Kyari stressed that the target of the president was to have seven per cent Gross Domestic Product (GDP) growth, saying you cannot have this if there is distortion in demand and consumption patterns. 

In a related development, speaking on “The Morning Show” on ARISE News Channel, Kyari stated that the adjustment in the prices of petrol was not fixed, saying pump prices would continue to change in reaction to market forces. Kyari also noted that the removal of subsidies would improve efficiency in the downstream sector.

Kyari stated, “The price we are seeing today at our filling stations is the current market price of the commodity. So, what this means is that prices in the market can go down at any time and, of course, the market will adjust itself.

 “The beauty of this is that there’ll be new entrants because marketing companies’ reluctance to come into the market all along is the very fact that there’s a subsidy regime that is in place.

“Subsidy regime doesn’t have the guarantee of repayment back to those who provide the product at a subsidised price. Now that the market is deregulated, oil marketing companies can actually import product, whether it is produced locally, they can buy and take them into the market and sell it at commercial price.

“Therefore, you will see competition, even with NNPC, and by the way, by law, NNPC cannot do more than 30 per cent of the market going forward. As soon as the market stabilises, oil-marketing companies are able to come in. That means that even the requirements of energy security in the law indicate that you have to be up be able to have at least 30 per cent of the stocks in the country.”

On the issue of inefficiency and extra burden on the federal government along the downstream sector, Kyari said those inefficiencies would be eliminated.

NLC Mobilises for Action against New Fuel Price Hike 

NLC said it would hold an emergency NEC meeting today in Abuja to decide on appropriate steps to take over the massive increase in the pump price of Premium Motor Spirit (PMS). It called on the federal government to obey the 2023 Appropriation Act and call NNPC to order.

In a statement, NLC said Nigerians from all walks of life, including civil society organisations, had continued to visit the Labour House in Abuja, to show solidarity with the congress and support its position against the petroleum products price hike by the federal government and to demand that necessary action be taken with their support to ensure that the federal government reverses the decision to withdraw petroleum subsidy.

The union said a delegation of Northern Women Assembly (NOWA), led by its National President, Alhaja Aisha Hassaini, and Miyetti Allah Peace Initiative, led by its National President, Hon. Yusuf Musa Ardo, were at the headquarters of NLC yesterday, to register their displeasure the sudden increase in the prices of petroleum products by the federal government.

It said the northern women group expressed dissatisfaction with the hardship and increased suffering, which the petroleum price hike had foisted on their members across the north.

According to NLC, the women urged the labour movement to immediately take steps to get the government to revert to the old pump price. 

It said, “The women insisted on mobilising their members towards any action that may become necessary to make sure that the government does the right thing for Nigerian women, stating that women bear the greatest brunt of every bad policy of the government.”

NLC said Miyetti Allah Peace Initiative brought a petition from members demanding the protection of NLC against anti poor policies of the government. It said the association lamented the huge burden, which the petroleum price hike had already foisted on their members, adding that they are afraid of what the future portends if this is allowed to stand.

NLC president, Joe Ajaero, said the union had assured all those that visited the congress since Tuesday of its continued commitment to taking all necessary measures within the law to protect the interest of Nigerian workers and masses, no matter the quantum of opposition. 

The congress stated, “We called for patience and continued unity so that we can present a common front against all forms of oppression.

“It has, therefore, become important that we inform the federal government of the expanding and deepening anger amongst the populace, which is increasingly building a coalition of the suffering and deprived that may lead to a conflagration of unexpected dimensions if nothing is immediately done to assuage this snowballing feeling of angst.

“We advise the government to quickly revert to the old pump price since provision was made to cater for subsidy in the current budget to cover this period.” 

Ajaero said in the statement that NLC believed that government could not continue to break its own law and expect the citizenry to be law abiding because the 2023 budget was an Appropriation Act of the National Assembly.

He said the on-going dialogue with the government might be imperilled if the insistence continued, especially when there it seemed that there is a clear, deliberate and wilful breach of the law by those who are supposed to be its custodians. 

Ajaero stated, “Any act of impunity encourages lawlessness and leads to serious breach of trust and reduces citizenship belief in leadership. These are basic ingredients needed by the government to govern, which it seems to be in a hurry to defile. Citizens connect is critical for the survival of any government. 

“The on-going dialogue with the government may be imperilled if the insistence continues, especially when it seems that there is a clear, deliberate and wilful breach of the law by those who are supposed to be its custodians. 

“As the pressure continues to mount from the outcry of the citizenry for a quick mitigation of the increasing hardship, which this has become for Nigerians, we are worried that patience may run thin and may snap, leading to actions that may no longer be controlled.

“We, therefore, call on the government to obey the 2023 Appropriation Act and call the NNPC to order.

“Encouraging local refining of our crude to meet domestic demand is the surest way to resolve the subsidy impasse and stave off its negative consequences on the nation.

“As we go into the Joint CWC/NEC meeting of both congresses tomorrow to further discuss this unfortunate price hike, we urge all Nigerians to be prepared. The will of the people must prevail.”

Lawmakers Urge FG to Suspend DSDP Contracts, Create Palliatives to Cushion Removal Effect for Nigerians

The House of Representatives, at plenary yesterday, stated that with the petroleum subsidy removal, the federal government should forthwith suspend all Direct Sales Direct Purchase (DSDP) contracts. The House said NNPC should act according to the provisions of the Petroleum Industry Act (PIA) in order to ensure that the country was not short-changed in production, lifting, and sale of crude.

The House also said while the federal government should out rightly remove subsidy on all petroleum products, it should immediately design measures and palliatives to cushion the effects of the removal for Nigerians effective from this year, through the provision and procurement of CNG Buses as an alternative transport system with cheaper fuel consumption.

According to the lawmakers, the government should also introduce intermodal, regional and national transport system to ease mass movement of people across the country.

The directives followed the adoption of the 11 recommendations by the ad-hoc committee that investigated the Petroleum Products Subsidy Regime in Nigeria from 2013 to 2022.

Lawmakers had resolved to look into the subsidy regime following the adoption of a motion sponsored by Hon. Sergius Ogun (PDP-Edo), on June 29, 2022.

Ogun had, while moving the motion, said due to the decline in the production capacity of the refineries, NNPC found it more convenient to export domestic crude in exchange for petroleum products on trade by barter basis described as DSDP arrangement.

He expressed concerns that the consumption rate of petrol was 40 million to 45 million litres per day, while NNPC used 65 million to 100 million litres per day to determine subsidy as discoverable from NNPC’s monthly reports to the Federal Allocation Committee (FAAC).

Presenting the report from their investigation 11 months later, Chairman of the Ad-hoc Committee, Hon. Ibrahim Aliyu, advised that the Revenue Mobilisation Allocation Committee should lead a reconciliation meeting between NNPC, Federal Inland Revenue Service (FIRS), Joint Venture Contractors (JVCs), and the commission on the utilisation of their crude entitlements.

Aliyu also urged that further investigation through a forensic audit by the office of the Auditor General of the Federation be made to ascertain whether the N413 billion borrowed from the Central Bank of Nigeria (CBN) for subsidy payments was refunded after the passage and assent of the 2015 budget, as earlier approved by the president, and the report of the Auditor General to be submitted to the House for further legislative action.

Other recommendations adopted by the House included, “That the Nigerian Midstream Down Stream Petroleum Regulatory Commission should issue stricter and most appropriate regulations, as provided in the PIA, to ensure that Nigerians are not short-changed through profiteering; that the Nigeria Customs Service and Weight and Measures Department of the Federal Ministry of Industry, Trade and Investment be equipped to ascertain the actual daily crude oil lifting from the country for proper checks and balances; that the committee recommends that the NEITI Act, 2007 be amended by the National Assembly to be in tune with global best practices.

“With the total deregulation of the sector, all the agencies involved in crude lifting/security should have a representative with the Nigerian Navy as a lead agency to physically asses and document daily crude production and lifting; that the committee also recommends that the federal government should as a matter of urgency, liaise with the National Assembly to fashion out critical areas of economic development, which the additional revenue from the proposed subsidy removal will be appropriately utilised, and that given the constrain of the committee and overlapping events, the National Assembly (HR) Standing or Ad-hoc Committees be saddled with such responsibility to conduct full-scale investigation on the defaulting oil companies and MDAs that have not met the expectations of the committee to ascertain their level of involvement or otherwise and further protect the commonwealth of the country.”

The lawmakers also considered and passed the report on a bill seeking for an Act to Repeal the Defence Industries Corporation of Nigeria Act, 2004 and Enact the Defence Industries Corporation of Nigeria Act, 2023 to Operate, Maintain and Control Subsidiaries and Ordnance Factories for the Manufacture, Storage and Disposal of Ordinance and Ancillary Stores and Materiel. 

The proposed legislation was sponsored by Chairman, Committee on Defence, Hon. Babajimi Benson (APC, Lagos).

Meanwhile, the House deferred consideration on a Bill for an Act to Amend the Corrupt Practices and Other Related Offences Act, 2000, to strengthen the role of the Independent Corrupt Practices and Other Related Offences Commission, and allow it prosecute cases before the Federal High Court.

Civil Society Group Protest Increase in Fuel Pump Price, Block Major Roads in Edo

Edo Civil Society Organisations (EDOCSO), yesterday, blocked a section of the Benin/Lagos highway to protest the increase in the pump price of fuel. 

The protest took place at different locations in the state, and it obstructed vehicular movement.

During the protest, EDOCSO called for urgent reversal of the fuel pump price increase. It lamented that Nigerians were already confronted with a lot of challenges, adding that an increment in the price of the product would further subject them to hardship and possibly push many to premature death. 

Displaying placards with inscriptions that read, “Nigerians can’t buy petrol at N520”; “We can’t buy petrol at N520 but N210”; “Petrol must be N210 till July end”, the protesters said they would continue today, until the government found addressed their demand. 

Speaking with newsmen in Benin City, former Coordinator General of EDOCSO, Omobude Agho, said the essence of the protest was to get the attention of President Bola Tinubu, so that he could reconsider the decision on the fuel pump price and put things in place to relieve the plight of the masses. 

Agho said, “We are protesting because of the increase in petrol pump price, which started yesterday, where a president, by the word of the mouth, will just make a sentence and the marketers will move the price from N210 to over N500.

“We were shocked to see that even NNPC Limited fixed over N500 as the pump price. So, we feel this is a plan to kill Nigerians or send us to our graves. 

“If we sit down, fold our hands and let this continue, only God knows what policy they will come up with tomorrow. What we are doing is testing the microphone. We have not actually started. If by tomorrow, we do not hear any news, then we will move to other directions. 

“The strategy for this protest is called local protest, we are localising the protest. This means it is happening in different areas and not on one axis. It is currently on-going in places like Uselu Shell, Ologbo, Siluko and Agbor Park. By tomorrow, more areas will be activated.”

Removal of Fuel Subsidy Must Not Fuel Poverty, Amnesty International Advises

Nigeria’s removal of fuel subsidy must not exacerbate poverty in the country, Amnesty International advised.

Responding to the removal of subsidy, Acting Director of Amnesty International Nigeria, Isa Sanusi, said, “President Bola Tinubu’s decision to remove fuel subsidy has left millions of Nigerians terrified about the knock-on effects that it will have on their daily lives. Many are concerned that they will be unable to meet the costs of education, food and healthcare.

“The government is yet to suggest any ways to mitigate the impact of this decision for people on low incomes.

“While all countries are required to eventually remove all fossil fuel subsidies to meet their human rights obligations in the context of the climate crisis, they should not do so in a way that undermines the ability of people on low incomes to secure their right to an adequate standard of living.”

Sanusi noted that it was vital that the removal of the subsidy was accompanied by social cushioning and protection measures.

He stated, “Nigerians should not have to pay the price of decades of political and economic mismanagement of the subsidy scheme.

“The authorities must finally respond to longstanding demands by civil society and parliamentarians to investigate the fuel market chain and hold accountable all those involved in smuggling, hoarding and ‘subsidy scams’ — regardless of rank or status.

“The Nigerian authorities must urgently put in place measures to protect the rights of people most affected by the removal of the fuel subsidies and prioritise addressing widespread hunger, higher unemployment and the rapidly falling standard of living.”

Don’t Be Distracted by Antics of Discredited Labour Leaders, Oil Marketers, Northern Group Tells FG

Coalition of Northern Groups (CNG) said the federal government should not to be distracted by the antics of persons it called discredited self-serving labour leaders and unscrupulous oil marketers, who would seize every opportunity to undermine the good intentions of government. 

Spokesperson of the group, Abdul-Azeez Suleiman, in a statement issued yesterday, expressed concern that NLC had developed a penchant over the years for mass public deception over issues of serious national importance. 

It said it observed that on every occasion, NLC would deceive the public into believing they were protecting their interests; only to betray the cause, and negotiate with the government at the expense of the suffering masses.

The group said the first instance was the NLC protests over harsh economic policies of former President Muhammadu Buhari’s government in February 2017, which came to an abrupt end without achieving any results and no convincing explanation to the public. 

It said, “Then came the September 2018 strike, which was also terminated after the NLC met with government officials and compromised the effort with no effect. 

“The worst scenario was the October 2020 organised labour plan to shut down the entire economy in protest over the increase in the pump price of petrol and a hike in electricity tariff.”

The group stressed that the strike was called off at the last minute after a meeting between government officials and labour leaders in Abuja. 

It pointed out that it took exception to the move by labour at that time, describing it as a huge trade off and compromise in its strongly worded letter of October 6, 2021 to the former President of the Nigeria Labour Congress (NLC), Ayuba Wabba, expressing disappointment in the labour leadership, for deliberately suspending an action meant to check the arbitrary hike in fuel prices by the Buhari administration. 

CNG added, “Now that NLC wants to take the nation for granted once more, we demand that it should first of all explain its whereabouts at the time the budget was prepared, presented, defended by the government of the former president, Muhammadu Buhari, and passed by the ninth National Assembly without the provision for subsidy.

“We call on the federal government not to be distracted by the antics of discredited self-serving labour leaders, unscrupulous oil marketers and a few unpatriotic officials of the NNPC, who would seize every opportunity to undermine its good intentions.”