TUC confronts Silva as FG says fuel prices rise
On Tuesday, a union convention hit the chief oil minister, Timipre Silva, who advised Nigerians to brace themselves for the pain of rising crude oil prices.
In addition, on Tuesday, the Nigerian Producers Association, the Lagos Chamber of Commerce and other stakeholders advised the federal government to use rising crude oil revenues to address poverty and spur inclusive growth.
The groups said this in separate interviews with The PUNCH as they responded to a statement by Silva, who warned Nigerians last Tuesday to expect the benefits and suffering of rising global crude oil prices.
For Nigeria, where crude oil accounts for roughly 50% of government revenues and over 90% of export earnings, rising oil prices mean higher revenues.
On the other hand, the rise in oil prices also leads to an increase in the cost of petroleum products, since the country is highly dependent on imports due to the lack of domestic processing.
Silva, speaking at the inauguration of Nigeria’s Upstream Cost Optimization Program in Abuja, said: “Since we are optimizing everything, the NNPC (National Petroleum Corporation of Nigeria) should also think about optimizing product costs because, as we all know, prices oil where they are today: $ 60.
“As desirable as it may be, it also has serious implications for product prices. Therefore, we want to have fun, and as a country we must be ready to endure pain. “
He added, “Today the NNPC will be hit hard by this. We all know that there are no subsidies in the budget. So, somewhere along the way, I believe the NNPC cannot continue to take this blow. suddenly.
“As a country, we benefit from higher crude oil prices and hopefully we will also be willing to endure some pain from higher commodity prices.”
PUNCH exclusively announced on Tuesday that the landing cost of Premium Motor Spirit (gasoline) imported into the country rose 13.34% in one month to around 180 Argentines per liter due to rising global oil prices.
The world oil benchmark Brent, which rose to $ 59.34 a barrel on Friday from $ 53.70 a barrel on January 7, crossed the $ 60 mark for the first time in more than 12 months on Tuesday.
The price of crude oil represents a significant portion of the final cost of gasoline, and the federal government’s deregulation of gasoline prices last year means that the price of gasoline will reflect changes in the international oil market.
Since November 13, 2020, when the prices of the LDC pump last rose in the country, the price of oil has risen more than 45%.
In line with the Petroleum Regulatory Agency’s gasoline price model, the cost of petrol jumped to NOK 179.67. Per liter on Friday from NOK 158.53 to N202.67 per liter from 181.53 N per liter.
The rise in crude oil prices pushed the Platts gasoline price up to $ 543.25 per metric tonne (NO $ 157.99 per liter using £ 390 / $ 1) last Friday from $ 480.25 per ton (AU $ 139 per liter) last Friday. Jan. 7.
The NNPC, which has been the country’s only oil importer in recent years, continues to rely on marketing, despite deregulating the oil sector.
The federal government lifted the gasoline subsidy in March 2020 after lowering the gasoline price to NOK 125. Per liter from 145 N. E. Due to the sharp drop in crude oil prices. The decline in prices lasted until June.
Gasoline prices rose in four months in Nigeria: from 121.50 to 123.50 per liter in June to 140.80-143.80 in July, 148-150 in August, N158-N162 in September and N163-170 in November. …
No honor in his statement, Congress criticizes minister
In response to the minister’s statement, the TUC inquired why the government was always ready to announce a price increase for gasoline pumps, but was slow to implement the agreements reached with the organized workforce.
TUC President Quadri Olaleye, who said this when PUNCH asked to respond to the minister’s statement, noted that there is nothing worthy in what the minister said.
The union leader said: “The question is why the government is always ready to tell us about the rise in the price of crude oil in the international market and the need to raise the price of PMS (Premium Motor Spirit) here, but it always takes them weeks, if not months, to fulfillment of agreements reached with trade unions? Everything points to one thing: they have no mercy for the poor of this country. “
Olali noted that the government’s lighthearted attitude towards the plight of workers and other Nigerians showed that they didn’t care.
He also argued that they also seemed indifferent to poverty, insecurity, and other social plaques caused by their policies.
The TUC leader added: “In every step and statement of government officials, you can see and feel their carefree attitude and indifference to our situation.
“They don’t seem to be worried about the poverty of Nigerians and the unemployment / insecurity that their hated policies have created in the country. There is nothing worthy in what the minister said. “
Commenting on the minister’s statement, MAN CEO Shogun Ajayi-Kadir said the projected increase in income should benefit from inclusive economic growth, which should include massive job creation.
He noted that the positive side of domestic revenue growth as a result of rising international crude oil prices “now threatens to expose the negative side for us.”
He said: “Even if the economy looks simple, any possible increase in fuel prices in Nigeria must be carefully considered. This is due to its potential negative impact on the unstable economic and security situation in the country at the moment.
“In addition, we are seeing only some degree of industrial stability and are just clinging to open economic and social life amid the devastating COVID-19 pandemic. I’m not sure if we are prepared for fuel-driven inflation. This is sufficient despite the high costs that are heralded by companies that are already forced to generate their own electricity for long hours due to insufficient supply.
The increase in crude oil revenues is expected to have a multiplier effect, MAN said.
“Moreover, for those wishing to justify a possible increase, the question arises, what will the government do with the corresponding increase in revenues from the sale of crude oil on the international market? This should usually negate the increase in pain resulting from rising fuel prices. Are we ready to turn this unexpected condition, so to speak, into inclusive economic growth and take advantage of its inherent multiplier effect? Will it fund productivity, job creation and additional investment? “
LCCI: Nigeria faces a dilemma
LCCI CEO Dr. Muda Yusuf said the country must find a balance between social considerations and commercial and economic considerations.
According to him, the policy of deregulating the refining sector of the oil industry posed a dilemma at such a time.
He said: “From a purely economic and commercial point of view, this is a policy that we have to support no matter what the oil price is, because we have no way to continue the fuel subsidy and related problems, and moreover, the continuation of this the path is not in the interests of the economy, ”he said.
According to him, the subsidy regime entails a heavy tax burden on public finances, the problem of corruption and the problem of leakage of oil products to neighboring countries, including.
Yusuf said, “But the dilemma is the implications for the well-being and social conditions of the people, as we are dealing with a situation of extreme poverty among the majority of Nigerians.
“We are dealing with an economic downturn, already high production and transport costs, and a population already suffering from environmental problems. We are dealing with a population characterized by high income inequality.
“So, it’s important that we have a balance, because not deregulating the industry is not really an option; therefore we must find a working model – a balance between social considerations and commercial and economic considerations. ”
FG punishes Nigerians for failing to run refineries – The Economist
Olabisi University economics professor Onabanjo Sherifdin Tella said the government should not punish citizens.
Economist and senior lecturer at Lagos Business School, Dr. Bongo Adi, said now is a bad time for fuel prices to rise.
According to Adi, Nigerians are facing social and economic problems imposed on them by the government, and higher gas station prices will push Nigerians further into poverty and misery.
He said: “Nigerian citizens from all over the world face enormous risks to their livelihoods, their safety and, of course, their health due to the coronavirus pandemic. Times have never been worse than now. In 2021 “.
Former president of the Association of National Accountants of Nigeria, Dr. Sam Nzekwe, said the government should be aware of the challenges Nigerians face during the COVID-19 period as prices for goods and services have skyrocketed.
Source: – Punch ng