Big Stories This Morning

Fuel Subsidy: Falana Reacts As NLC Plans To Embark On Nationwide Strike

Human rights lawyer, Femi Falana (SAN) has reacted to the plan by the Nigerian Labour Congress (NLC) to embark on a nationwide strike next Wednesday over the removal of fuel subsidy. Recall that President Bola Tinubu had in his inaugural speech declared that “fuel subsidy is gone,” a development that led to the hike in the price of petrol across the country.

Following the announcement by the President, the Nigeria National Petroleum Company Limited (NNPCL) reviewed its pump price for the product from about N185 to over N500. Since the move by the oil corporation, the NLC has asked for a reversal of the removal of fuel subsidy and threatened to protest next Wednesday over the hike in petrol price. But while speaking on Channels Television’s Politics Today on Friday, Falana said the NLC’s ultimatum over the hike in petrol prices is a chance for the government to review its position on the matter.

The senior lawyer stated that the government will have to look at the totality of the economy before removing the subsidy. He said: “Government has begun discussions with the Nigeria Labour Congress which perhaps should have preceded the announcement. But it is a new government and I expect as a new government, they should take advantage of the opportunity. “When workers issue an ultimatum, in Nigeria and wherever it is an invitation for the government to review its position.

“The government this time around will have to look at the totality of the economy. What you call fuel subsidy is an infinitesimal aspect of subsidies in the country.” Falana stressed that the government has other forms of subsidies benefiting some sects of persons, adding that the removal of the subsidy means the government cannot tackle smuggling and has now “punished the people”. He also lamented the dollarisation of Nigeria’s economy, reiterating his claims that some schools and other businesses now take payments in dollars.

“Why must I be looking for dollars in my country? Why should some schools be collecting dollars as fees? Are rents being collected in dollars? Some fees are paid in dollars to professionals. “These guys are ruining the economy by spending dollars irresponsibly and it is illegal,” he noted.


Source: Naija News



Subsidy Removal: Petrol Prices Now Determined By Market Forces – NMDPRA

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said it will no longer fix prices or release templates for petrol prices. The Authority chief executive (ACE), Engr Farouk Ahmed, explained that under the liberalised market, market forces are allowed to dictate prices.

Ahmed added: “We put the regulation in place, we make sure quality control is complied with, we make sure the product is there and we give licence to a prospective importer. The market is now open for everybody that wants to import as far as they meet all the requirements. So, it is not about the NNOC alone. For everybody in the sector, we make sure we guide their operations whether at the depot or wherever the product is but we will not put a cap to say this is what the price must be. As far as we are concerned in the NMDPRA, this is not like before when the PPPRA fixes the price. In a deregulated market, it is the market force that dictates the price.”

Ahmed explained that the NNPC’s role is to fix the prices of the petrol it imported and not take over the responsibilities of the Authority. “In the case of the NNPC, the organisation is the sole importer at this point. We told the NNPC to recover its costs because they know how much it cost them to import the product and sell it. Of course, we also know how much shipping, offshore, ex-depot and ex-pump are. But we cannot tell them to sell at a price because the market is deregulated,” he said.

The NMDPRA chief also revealed that the Federal Government has officially scrapped petroleum equalisation as well as the national transport allowance. He also stated that the NMDPRA and the Federal Competition and Consumer Protection Commission (FCCPC) will mount aggressive monitoring of activities in the downstream sector to prevent profiteering by petroleum marketers. Ahmed further disclosed that marketers are now free to source their foreign exchange anywhere around the world to import petroleum products and then recover their costs without impediments.

On where the importers will source their forex from, Farouk said: “No. the CBN will not give dollar to anyone because it is an open market. Anyone willing to import should get the dollars from anywhere to import. Anyone willing to open a letter of credit from any part of the world can do that to import. That marketers can source their forex from anywhere is the beauty of the liberalised market that the NMDPRA has introduced based on the provision of the law.”

Though no template spells out the pricing components of petrol price, Ahmed hinted that the market will henceforth be modulated to allow the fluidity of prices. He added: “This means that the price will no longer be static. It will depend on the international price of the gasoline market. But this does not imply that marketers can sell at any price. If we find that certain prices are way above the expected profit margin, we and the FCCPC can move in to curb such excesses because that will be profiteering. The market structure will dictate the price swings at every point in time.”

He maintained that the Dangote will help the nation in two ways, adding, “The refinery will give Nigeria easy access to petroleum products on-land for security reasons because it is within the Nigerian territory. Secondly, it will increase employment for our professionals.”

However, Ahmed was quick to caution against optimism for cheap petroleum products, saying, “I don’t think products will be cheaper because the company will be buying crude oil at the international price. However, it is going to be cheaper in terms of freight rate. Bringing of cargoes from Europe. Dangote Refinery is a game changer in terms of accessibility. By the time the NNPC refineries and other modular refineries across the country come on stream, Nigeria will be a net exporter of petroleum products.”


Source: Leadership