The incoming Bola Ahmed Tinubu administration and the organised labour will face the challenge of the contentious subsidy on petrol.
During his electioneering, Tinubu made it clear that he would remove subsidy on fuel when he cones into office.
He maintained that paying humongous sums represented a huge burden the government under his watch would not bear.
Recall that the outgoing Muhammadu Buhari administration had tactically shifted the subsidy removal question to the incoming administration, a decision many said was akin to cowardice.
But Labour says it is waiting at the corner, adding as it will have none of Tinubu’s proposal to remove subsidy on fuel without doing first things first.
Labour’s position which it reinvigorated some days ago is that the incoming government must first of all fix the nation’s array of ailing refineries and get them working. Only then will the workers consider talks about removal of subsidy on petrol.
Workers who spoke to Sunday Sun last week were united in describing the Federal Government’s subsidy dealings as a ruse. They were unhappy that the much talked about fuel subsidy on petrol was heavily fraudulent and deceitful, regretting that previous governments – especially the Buhari government was insincere about it.
The workers’ contention was that if the refineries were fixed, all the balderdash about subsidy would die and disappear naturally.
Subsidy and the workers
The workers said that removal of subsidy on Premuim Motor Spirit (PMS) without encouraging local refining would not only be injurious to salary earners, but to all Nigerians.
In his comments, one-time Trade Union Congress (TUC) Secretary-General, Peter Esele, admitted that there was subsidy on petrol, adding: “We cannot deny that.”
Akintoye Hassan, chairman, Nigerian Union of Teachers (NUT), Lagos State chapter, also admitted the government’s existing subsidy on petrol.
But he was unhappy with the way the government was going about it, contending that the move would hurt the workers.
“In Nigeria, movement from point to point is dependent more on the roads than any other means. We over rely on petroleum products.
“As an income earner, who derives his means of livelihood from salary which is fixed, immediately there is removal of this subsidy, it means the price of petroleum product will go higher, even when that will not translate to increment in the workers’ salary. So, who will make up for that difference?”
He said: “As workers, there is no way we will support the removal of subsidy. But we know that it is not a policy that we can oppose till eternity. That is why the Nigeria Labour Congress (NLC), in conjunction with our sister body, the Trade Union Congress (TUC), at various meetings with the Federal Government, has been proposing that we are not against subsidy removal since it is a source of leakage in the economy.”
An official of NLC who did not want his name in print told our correspondent that “the issues are very clear; the NLC perspective regarding the fuel subsidy removal has not changed. Why we have kept quiet ever since is because they know where we stand, and we don’t want to probably play our card before the game starts.”
Let refineries work first
For Hassan, the NUT position is that the government must ensure that the refineries are working before the planned subsidy removal.
“If all the refineries are working, then there won’t be any need to procure this finished product from outside the country. The value chain, the cost chain, is in multiple: carriage, various forms of taxes, and even distribution with the country as opposed to when the refineries are working. The distribution will be via pipe lines, although that has had its own challenges over the years.
“But if our crude is refined locally, ordinarily no worker will oppose the subsidy removal. But as long as that is not done, we will continue to oppose the idea because of its financial implication on fixed income earners.”
He was not convinced that the recent commissioning of Dangote refinery would change anything.
His view was “we will sit back and watch because a local refinery needs crude oil, and we know our OPEC quota. Can we produce enough for this refinery? That means we still have to procure the crude from outside the country, which will still be determined by the international market rate and the value of the naira at the time of the exchange. These are some of the challenges. So, at the end of the day, the subsidy we are still talking about will still have its effect. So, it is a multi-faced issue.”
His also noted that “if you remove subsidy or don’t, it is not only workers that will suffer, Nigerians also will suffer. It has its implication for all the categories of income earners. But because the average worker is a fixed salary earner, he will suffer it the more. But there is no citizen that will be left out of the burden.”
For Auwalu Kiyawa Yusuf, general secretary, Medical and Health Workers Union, “our argument has been that if the government will allow domestic refineries to work, the issue of importing petrol will not be there. So, what we are agitating is this: let the government repair the refineries; let the refineries be working.
“We want our crude to be refined locally. If the government is able to do that, the issue of payment of subsidy will be history.
“If you remove the subsidy without putting the refineries to work, definitely that will upset not only the workers, but a vast majority of Nigerians. Because there will be hyper inflation.”
An NLC official also insisted that the refineries must first work before the government mulls removal of subsidy on fuel.
“We have said regularly that we have refineries. We are not talking about the Dangote refinery, it is a private enterprise. We are talking about our local refineries, our publicly-owned refineries. We are talking about our refineries which have to come on stream, whose operations they have deliberately grounded and frustrated in the past eight years. Now, if they come on stream, then all of us will sit back to see if there is subsidy actually.”
Then he added: “We know what their game is, but the truth is that if this product is refined in Nigeria, we will not be taking about subsidy. That is the truth.
“Some people do not want the refineries to work so that they will continue profiting from the suffering of the Nigerians.
“You cannot be importing refined products because of your refusal to see that the local refineries operate. And yet, you want to talk about subsidy removal because our understanding of subsidy removal is increase in the price of petroleum products, and increase the burden on Nigerians. That is unacceptable to the Nigerian workers and to Nigerians.
“They have told us over and over, this Buhari administration, that they had withdrawn subsidy and increased the pump price. Yet they are still telling us there is still subsidy and we keep asking: is this subsidy a cat with nine lives that never dies?”
Govt’s subsidy fraudulent, insincere
The NLC bigwig emphasised that “the government has not been sincere with Nigerians over the subsidy removal matter.
“We saw the investigation carried out during the ex-President Goodluck Jonathan era on the subsidy scam. Now, where is that report of the House of Representatives committee? You cannot find it anywhere.”
He then went on to tag the subsidy scheme a “scam, fraud and gang up against the Nigerian people.
“If you do not want Nigerians to suffer, you rather fight the subsidy fraud. After all, this outgoing government said it was fighting corruption. If they had removed the fraud before now, we won’t be having this challenge.”
Drawing from other experiences, he noted that “the past election campaign brought to the fore, the question of who is ‘drinking’ the excess oil the government said it had been subsidising?’
“Countries with larger human and vehicular populations than us are consuming lesser fuel than Nigeria. So, who is ‘drinking’ the extra fuel coming to Nigeria?
“We know that they usually pad the figures for themselves so that they will continue stealing. That is what we need to remove first. We need to know what the actual consumption figures are.”
40% pay rise for FG workers unjust
Also speaking on the proposed 40 per cent increase in salary proposed by the Buhari regime, the NLC boss queried: “The question is this: what is the percentage of the Federal Government workers in relation to public-sector workers in Nigeria? Then what is the ratio of the Federal Government workers in relation to the Nigerian work force? Very infinitesimal! For us, that is good, but not what we asked for.”
Yusuf described the 40 per cent increment for Federal Government workers as “grave injustice.
“The market we all go to buy goods, is it for Federal Government workers alone? There are other people who also go there to buy their needs.
“If you increase salaries whereas the inflation is there, it will be like giving somebody a gift with the right hand and taking it from him with the left. This is why we have always argued that the refineries should be fixed.
“If the local crude is refined here, we will be very much sure that the products will be available; there will be competition among the marketers. Through that, the price will go down.”
His thought on the Dangote refinery is also apt.
“Now, if Dangote can beat his chest as an individual, and do what he has done, why can’t our government?
“So, they are systematically coming back to our argument: let the refineries work.
“Once our refineries are working, you cannot even go to the point of talking about paying subsidy on petrol.
“Therefore, increasing the salaries of workers is not the solution. That will negatively affect the live of Nigerians and not the workers alone. What then will be the essence of increasing the salaries of workers when the price of everything will skyrocket?” he asked.
Way forward
For the incoming administration, it might be import to listen to some suggestions made by the workers.
“We need more refineries to come on board.
“We ought to have refurbished our refineries if not all together constructed new ones in the last eight years,” Yusuf emphasised.
He advised that “those who are doing modular refineries along the coastal regions, should be formalised, their operations monitored and supervised so that we can have this product available to the average Nigerian.”
The NLC was more emphatic on its suggestion. “Before you start talking about subsidy removal, get the refineries working. Buhari kept saying he would get the refineries working, but now he is shipping out, yet the refineries are not working.
“As soon as the refineries are working, the subsidy – if there is any – will disappear on its own.
“We won’t have any need to import products.
“If we are not importing any product, we won’t be talking about subsidy.”
But Esele’s considered view is slightly different. “What we have to do now,” he said, “is to find a balance, the balance of subsidy ‘to be or not to be.’
“I believe in phased withdrawal; I think subsidy has to go. The inherent corrupt practices involved in it make it difficult for subsidy to go and for anybody to want it to stay.
“Can we continue to sustain the volume of subsidy payment in the long run? I will say no. Can we also go ahead and say we take away the subsidy at a go? I will also say no.
“But to carry out this phased withdrawal, you must also establish the fundamentals – make people to understand the challenges inherent in it.
“There is subsidy, but for you to understand that, you need to get to the bottom of that.
You need to be open. You need to be transparent. You need to tell the people how many litres of petrol they are consuming in a day. We need to know about the trade-by-barter we are doing whereby the NNPC gets 400,000 barrels a day. And the 400,000 barrels a day that is shipped abroad while the company abroad gives us petroleum product. What is the quantity of PMS, what is the quantity of DPK we consume? And don’t forget that we already have diesel deregulated. Therefore, there is no subsidy payment on diesel; there is no subsidy payment in kerosene. So, how are we now able to do all of that? That is where transparency becomes important in making Nigerians to understand why this subsidy needs to go.
“Another aspect is: how do you communicate why Nigerians would be paying so much on fuel? Don’t forget, crude oil is bought in dollars. And then we sell in naira. Whatever that is bought in dollar and sold in naira has tendency to be expensive or has tendency to be higher, the reason being that the naira is lower than the dollar.
“So, if you are buying a barrel of crude for say $70, and you do the conversion depending on where you get your foreign exchange from – at the bank N463, at the parallel market, N750. So the marketer that will sell will do that based on where he gets his forex from. So, how you are going to inform Nigerians why they are going to pay what they will pay is also key.”
Then looking at the flip side of things he added: “But we must know that all over the world, there is always subsidy somewhere. In the US, they subsidise a lot of things. In the capitalist world, let us start with the invasion of Ukraine by Russia, the price of crude went over the roof. And that made life difficult for people in the UK to put on their heater during winter. So, what did the government do? It had to subsidise every home so that they can survive the winter.
“Nigerian government can also learn from that and decide how to give whatever that is going to come, a human face.”