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Fuel Price Increase: Nigerians Subjected to Double Jeopardy – Osifo, PENGASSAN President

With Nigerians still smarting from the sudden increase in the pump prices of petroleum products announced on Wednesday, the Petroleum and Natural Gas Senior Staff Association, PENGASSAN, has berated the federal government for subjecting Nigerians to double jeopardy   by devaluing the Naira and at the same time increasing the prices of petroleum products. PENGASSAN also argued that this is not the right time to carry out such increase, especially now that the country is battling with the COVID-19 pandemic, stressing that the prevailing circumstances were better in 2012 when it was first introduced, compared to now.

Recall that the Nigerian National Petroleum Corporation, NNPC, on Wednesday increased the ex-depot price of Premium Motor Spirit, PMS, from N138.62K per litre to N147.67 while marketers are now selling at between N162 and 164 per litre. When the ex-depot price was N138.62, the pump price of fuel was between N145 and N150 per litre. But stating the position of PENGASSAN on Friday on Channels Television breakfast programme, Sunrise Daily monitored by TELL, Festus Osifo, the newly elected president of the labour union, did not see any justification for government’s action.

Defending this position, Osifo said “The driver of the pump price, basically, is your currency exchange. Today, what has necessitated this is not actually because of the fact that the product price is increasing internationally; the crude oil price, relatively, in the last six months had been relatively hovering between $40 per barrel to around $45 per barrel, at least in the last three months precisely. But what has necessitated this is actually devaluation. Today, we could observe that in the last three months, we’ve had devaluation up to 25%. So, when you devalue your currency, then government did it deliberately in order for the government to have more money. So now, the government is having more money, having done the devaluation and now passing the burden to us”.

Noting that petroleum products are not refined in Nigeria, but abroad, the PENGASSAN president argued that “Refining these petroleum products abroad, everything is priced in dollars, both the cost of crude oil, labour cost, and all other costs that go into it is priced in USD. So, by the time you now bring it to Nigeria, you are now asking us to pay in Nigeria, in a Naira that is devalued. So, by the time you factor in the 25% of the Naira that was devalued, we are now going to pay more. And that is why today, they are asking the consumers to pay more.

“The question that we have asked is this: for me, I think this is a double jeopardy; and for us, this is actually not the best time. If as a government you have devalued your currency and you are making 25% excess on top of your currency, which is fine; you have more money to pay workers, you have more money to meet your Naira needs; it’s fine. But again, you are now telling us that the landing cost has increased in Naira, not necessarily in dollars, and you are also passing that to the bulk of the Nigerian citizens; I think actually, this is a double jeopardy and all stakeholders need to engage the government properly”.

Frowning at the lack of proper consultation with stakeholders, Osifo said “for us in the organized labour, we think that a proper consultation wasn’t done. We think clearly that this is not even the right time to have done a thing like this. This is the era we are battling with a global pandemic. This is the era where the real wage of workers has diminished; this is the era where we are entering into recession. This is an era where in other parts of the world the citizens are being supported with different levels of palliatives. So, I think completely, that this is not the best time to have done this”.

Asked if the timing would have been right in 2012 when it was first introduced, the PENGASSAN boss said “No”, because according to him the push from the Nigeria Labour Congress, NLC, and the Trade Union Congress, TUC, was that certain conditions be met before removing subsidy. He however regretted that those issues do exist today.

According to Osifo, “In 2012, yes, there were a lot of fundamentals that weren’t taken into cognizance by the government and part of those fundamentals were, okay, you want to remove this, what are the efforts you are making to make our refineries work? So, 2012, the time was not also right because before the timing would be right, there are some certain parameters that must be met. The parameters such as making the refineries work, parameters such as putting palliatives in place for the workers. And even now, in my view, the timing today is more problematic compared to even 2012 because we are just battling with pandemic. I could tell you that a lot of households today, their real incomes are diminished. I could tell you, a lot of businesses have been shut down since March. I could tell you that today, Nigerians are facing hardship.

“I believe 2012 was even a bit better than the way it is today because the pandemic has ravaged the average household in Nigeria. You saw the last figures that came out from the National Bureau of Statistics about our GDP; we are actually in very negative GDP. By the next quarter, we could be seriously in recession. So, this is not the right time to have done this”.

Festus Osifo Photo
Festus Osifo
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