FG: Increase In Fuel Price Is Meant To Create 200,000 Jobs In The Country

The Federal Government says that the new price regime
for the downstream petroleum sector is
comprehensively designed to tackle the hardship faced
by Nigerians and create additional 200,000 jobs in the
country.
The information is contained in a bulletin issued by the
Ministry of Petroleum Resources and made available to
news men n Abuja on Friday.
It said that the new price template would potentially
create jobs through the envisaged new investments in
refineries and retailing of crude oil products.
It stated that the new pricing template would also
prevent potential loss of nearly 400,000 jobs in existing
investments in the sector.
The bulletin explained that new framework would on the
long run solve the recurrent fuel scarcity crisis by
ensuring the availability of the products at all locations
of the country.
It said the measure would also ensure the total
elimination of hoarding, smuggling and diversion of the
product while also stabilising price at the actual
product price.
It stated that government, through the new price
regime, would monitor the new price to ensure that
citizens got a fair value for the products they
purchased.
It said the new price would enable marketers to source
their foreign exchange independent of Central Bank of
Nigeria (CBN) and ensure adequate product supply in
all locations of the country.
It explained that the measure would enable government
to deliver on its statutory functions of power
generation, security, provision of education and health.
The document explained that the new price regime
would permanently eliminate subsidy payments and
ensure the availability of funds for the full payment of
monthly Federal Accounts Allocation Committee. It will
also providing additional funds for other palliatives and
help in stabilising the economy by creating access to
development loans .

NLC, TUC And CSO:You Have Till Wednesday To Reduce Fuel Price Or We Will Shut Down Nigeria

The emergency meeting debated extensively the
implications of government’s unilateral increase in
prices of petroleum products, noting government’s
disinclination for consultation on issues of public
interest and its obsession with protecting product
marketers at the expense of the Nigerian public. The
meeting expressed concern about government’s neo-
liberal policies which it considered a betrayal of its
electioneering promises and observed as follows:
During the electioneering campaign last year, the
Presidential Candidate of the All Progressives Congress
( APC ), Muhammadu Buhari, had promised that, if
elected president, he would not remove fuel subsidy if
there was any at all;
After his election, President Muhammadu Buhari had
maintained that there was no subsidy in the petroleum
product price regime and that even if there was, he did
not see how its removal would be beneficial to the
ordinary Nigerian, noting that the slightest product price
adjustment often leads to inflationary spiral and
unimaginable suffering for the people;
On January 18, 2016, the government further allayed
the fears of the Nigerian people by reducing the pump
price of PMS to N86:50, explaining that the reduction
was in furtherance of the implementation of the revised
component of the Petroleum Products Pricing for PMS
and kerosene;
The Minister of State for Petroleum Resources, Dr Ibe
Kachikwu had been speaking from both sides of his
mouth. Whereas last year, he had strongly canvassed
for the removal of “subsidy” in defiance of President
Buhari, about a month ago, he claimed the subsidy had
been removed through his ingenuity and that Nigeria
was saving $1billion from this process;
Organized Labour wondered what has informed
government’s sudden and dangerous policy
summersault and its desperate attempt to convince the
public that Labour was part of the decision that led to
this price increase;
In view of the fact that the board of the Petroleum
Products Pricing Regulatory Agency (PPPRA), which is
statutorily vested with powers to recommend prices,
has not been reconstituted, the price variation
announced by any officer of the agency or outside the
agency is not only ultra vires and illegal, it is a criminal
imposition on the citizenry;
The price hike from N86:50 to N145, representing
67.63% increase, is the height of insensitivity and
impunity as there was no previous consultation with
stake holders, especially the organized labour, or any
justification for this reckless decision other than the fact
that government believes it is accountable to no one;
The Minister of State for Petroleum Resources declared
that marketers will have to source their dollars from the
secondary market. The attendant pressure on the dollar
will lead to unimaginable rise in prices of commodities
and other services thus creating further hardship for the
people. Due to the volatility of the black market,
organized labour doubts that government would be able
to maintain PMS pump price at N145 per litre were the
hike acceptable or justifiable. At the time the PMS pump
price was fixed at N145, the exchange rate at the black
market was N320 to the Naira. Between Wednesday and
today when the new pump price was announced, the
Naira has further crashed against the dollar, first to
N340 on Thursday, then N365 on Friday morning and
N385 by close of business on Friday, all in 48 hours! At
this rate, we believe it will not take long before the
Naira becomes entirely useless against the dollar. It is
thus morally and economically suicidal to have tied the
importation of products to the secondary market
exchange rate;
In view of the fact that in the past five years, there has
been no increase in salaries or wages or pensions in the
face of devaluations, spiralling inflation and other
vagaries of the economy, this product price increase is
unrealistic, unaffordable, unacceptable and is thus
rejected;
Government is unable to justify this price increase other
than the puerile explanation that marketers need to
recover their costs, without a thought for the aggregate
or larger national interest including the need for local
refining and creation of jobs;
The government has remained incalcitrant in spite of a
subsisting court injunction on the issue of the criminal
increase in electricity tariff even in the face of ever-
worsening power supply situation;
From the foregoing, it is evident that the neo-liberal
forces in the government have taken over the
government and we should expect more inhumane
policies which will further degrade the living standard of
the average Nigerian. The punitive electricity tariff and
PMS product prices may just be teasers;
The implications are costly and far-reaching, with the
first and most significant being that we have become
dependent on massive importation of refined products
to meet our domestic needs in contra-distinction to
other OPEC members. Whereas most OPEC members
significantly meet their domestic needs through
domestic refining by an average of 80 per cent, Nigeria
on the contrary, at the pace it is going, will continue to
rely on about 90 percent of imported refined products in
the foreseeable future;
And because we are dependent on importation, the end-
user price will always be influenced or determined by
external factors such as the cost of refining abroad,
transportation and others denominated in the dollar. As
the Naira continues to depreciate against the dollar, so
will the woes of consumers in Nigeria continue to
increase, a situation the Marketers in classic greed will
exploit to their advantage;
Taking into account the utilitarian value of petroleum
products in Nigeria, all sectors are going to be
negatively affected by this mindless price increase as
virtually all the stakeholders are agreed that the most
significant contributor to the astronomical cost of doing
business in Nigeria is the cost of energy.
NLC, TUC and other civil society allies are not unaware
of the positions taken by the Unions in the oil and Gas
Industry. A process of engagement will be put in place
in order to ensure the success of the struggle to protect
the overall interest of the Nigerian people.
In consideration of all of the above, we urge government
to:
Revert to the old price regime in order to reduce the
suffering of the people and to consider this singular act
of mindless pump price increase as a betrayal of trust;
Revert to the pre-45 percent electricity tariff increase,
make meters available to consumers and stop
estimated billing;
Reconstitute the boards of PPPRA and NNPC without
further delay and give them their statutory right to
function alongside DPR in order to deepen the process
of consultation, checks and balances in the downstream
sector of the petroleum industry;
Intensify the prosecution of all those involved in subsidy
scams with a view to recovery and sanctioning of the
culpable;
Put in place enhanced local refining capacity within a
specified period in place of endless importation as an
enduring solution to the perennial problem of scarcity;
Reverse the entire deregulation and privatization
process which foists on the nation, private individuals
as drivers of the economy in contravention of the
constitutional provision that says government shall be
the driver of the economy and engage the organised
labour in the process of negotiation on key policy
issues;
Wean itself from the overbearing influence of the neo-
liberal elements in its fold who have not only staged a
coup but are determined to make this government
collapse even before the end of its four-year tenure;
Uphold its electioneering promises to Nigerians instead
of subjecting them to the vagaries of slavish policies
such as full devaluation of the naira and total removal of
subsidy as enunciated by the IMF and its agents in the
system;
In the event government fails to accede to these
demands on or before 12 midnight on Tuesday, May17,
2016, the Nigeria Labour Congress, the Trade Union
Congress and their civil society allies resolve to
commence the following actions with effect from
Wednesday, May 18, 2016;
Mobilize to the streets across the country,
ordinary and helpless Nigerians to whom they
owe the duty of protection;
Shut down all Banks, Sea and Airports,
Government and private offices as well as
Markets.
Commence indefinite nationwide strike action.
Fight/resist the machinations and cruelties of
the neo-liberal forces in the government as part
of the process of saving the government from
itself and the generality of Nigerians from
slavery.

Nigerian are therefore advised to stock sufficient food
items that will last for a while for the prosecution of the
current struggle against neo-liberal agenda in Nigeria.
For and on behalf of Nigeria Workers, Civil society allies
and the Masses;
Comrade Ayuba Wabba, mni.

Fuel Problem Is Not Caused By Subsidy Removal Osinbajo Explains

The Vice President explains the reason for the rise in fuel price.
In a statement issued in Abuja he said “I have read the
various observations about the fuel pricing regime and
the attendant issues generated. All certainly have
strong points.
The Statement:
“The most important issue of course is how to shield
the poor from the worst effects of the policy. I will
hopefully address that in another note.
“Permit me an explanation of the policy. First, the real
issue is not a removal of subsidy. At $40 a barrel there
isn’t much of a subsidy to remove.
“In any event, the President is probably one of the most
convinced pro-subsidy advocates.
What happened is as follows: our local consumption of
fuel is almost entirely imported. The NNPC exchanges
crude from its joint venture share to provide about 50%
of local fuel consumption. The remaining 50% is
imported by major and independent marketers.
“These marketers up until three months ago sourced
their foreign exchange from the Central Bank of Nigeria
at the official rate. However, since late last year,
independent marketers have brought in little or no fuel
because they have been unable to get foreign exchange
from the CBN. The CBN simply did not have enough. (In
April, oil earnings dipped to $550 million. The amount
required for fuel importation alone is about
$225million!) .
“Meanwhile, NNPC tried to cover the 50% shortfall by
dedicating more export crude for domestic
consumption. Besides the short term depletion of the
Federation Account, which is where the FG and States
are paid from, and further cash-call debts pilling up,
NNPC also lacked the capacity to distribute 100% of
local consumption around the country. Previously, they
were responsible for only about 50%. (Partly the reason
for the lingering scarcity).
“We realised that we were left with only one option.
This was to allow independent marketers and any
Nigerian entity to source their own foreign exchange
and import fuel. We expect that foreign exchange will
be sourced at an average of about N285 to the dollar,
(current interbank rate). They would then be restricted
to selling at a price between N135 and N145 per litre.
“We expect that with competition, more private
refineries, and NNPC refineries working at full capacity,
prices will drop considerably. Our target is that by Q4
2018 we should be producing 70% of our fuel needs
locally. At the moment even if all the refineries are
working optimally they will produce just about 40% of
our domestic fuel needs.

“You will notice that I have not mentioned other details
of the PPRA cost template. I wanted to focus on the
cost component largely responsible for the substantial
rise, namely foreign exchange. This is therefore not a
subsidy removal issue but a foreign exchange problem,
in the face of dwindling earnings”.

FG: Fuel Price To Rise To N145 Per Litre

The Minister of State for Petroleum Resources, Ibe
Kachikwu, on Wednesday, said any Nigerian entity is
now free to import petroleum products into the country,
subject to existing quality specifications and other
guidelines issued by regulatory agencies.
Kachikwu pronouncement effectively ended the fuel
subsidy regime.
The minister said that all Oil marketers will be allowed
to import the product on the basis of foreign
exchange procured from secondary sources and that
PPPRA template will reflect this in the pricing of the
product.
Further, Kachikwu said that new price band effective
from 11th May, 2016, would put the retail price of petrol
at N145 and below.
“Pursuant to this, PPPRA has informed me that it will
be announcing a new price band effective today, 11th
May, 2016 and that the new price for PMS will not be
above N145 per litre,” he said.
The minister explained that the decision to remove the
subsidy was reached after a meeting attended by the
leadership of the Senate, House of Representatives,
Governors Forum, and Labour Unions such as
theNigerian Labour Congress (NLC), Trade Union
Congress (TUC), Nigeria Union of Petroleum and Natural
Gas Workers (NUPENG) and Petroleum and Natural Gas
Senior Staff Association of Nigeria(PENGASSAN).
He noted that the persistent scarcity being expressed in
the country the inability of importers of petroleum
products to source foreign exchange at the official rate

due to the massive decline of foreign exchangeearnings
of the federal government.
“As a result, private marketers have been unable to
meet their approximate 50% portion of total national
supply of PMS,” Kachikwu stated.
-Tonye Bakare

Agriculture: Federal Government To Import Grasses For Cattle Rearers

According to the Senate, the move to support the
action of the Federal Government has become
imperative as the importation of grazing pastures for
cattle at designated places across the country will
proffer permanent solution to the protracted crisis
between farmers and herdsmen.
The committee also hailed President Buhari's directive
for the release of 10,000 tonnes of grains.
Speaking yesterday in Abuja, Chairman, Senate
Committee on Agriculture and Rural Development,
Senator Abdullahi Adamu, who dismissed criticism of
the move by some professors of agriculture who had
opposed the move, stressed that they had technology
to grow grasses, if they received government support.
He criticised the inability of the professors to proffer
solutions to the problem of grazing over the years,
adding that  they lacked any moral right to criticise the
government's move.
Senator Adamu, who noted that importing grazing
grasses and making them available to cattle rearers
would stop the movement of cattle from one place to
another, stressed that the move would also put paid to
the growing spate of killings by herdsmen.
According to him, the government will provide pasture
to curtail the continuous movement of cattle by
herdsmen.
He noted that in the United States, pastures and water
were provided to grow nutritious grasses for cattle's
sustenance, adding that the government must face the
reality of the moment by taking some painful decisions
to end the herdsmen and farmers' clashes.
"There are no easy fixes to the problem,'' Senator
Abdullahi said.
He also blamed the mindless killings by herdsmen on
growing indiscipline among the herdsmen.
Speaking further, Senator Adamu disclosed that
President Buhari had ordered the injection of 10,000
tonnes of grains into the system to ease the pains
caused by rising cost of grains in the country,
He also said that his committee had discovered that
the administration of Buhari met many silos in the
country empty, adding that his committee was
impressed that the federal government had prioritised
agriculture.
He said the Senate would provide the necessary
legislative support for the presidency to restore the lost
glory of agricultural sector in Nigeria.
It would be recalled that the  Minister of Agriculture,
Chief Audu Ogbeh, had in March this year, disclosed
that government had plans to begin the importation of
grasses for cows to reduce the movement of herdsmen
across the country.
Ogbeh, had disclosed that Buhari was setting up
grazing areas in various states of the federation as a
response to the clashes.
Addressing his Idoma people in Abuja who protested
the massacre of Agatu people in Benue State by
herdsmen, Ogbeh said: “We are producing massive
hectares of grass for the consumption of cattle; we
have received these grasses from Brazil and we are
growing them in massive quantities.
“Cattle herdsmen want grasses for their cattle; such
grass is what we are growing in large quantities and,
within the next three months, some of these will be
ready.''