NLC demands immediate reversal of fuel subsidy removal

NLC demands immediate reversal of fuel subsidy removal

A showdown between the organised labour and the Federal Government appears imminent over the issue of fuel subsidy removal as the Nigeria Labour Congress has warned the Bola Tinubu administration not to go ahead with the decision.

The NLC expressed displeasure over the pronouncement by President Tinubu in his inaugural speech on Monday that the subsidy is gone.

It said it was wrong to take the decision without consulting relevant stakeholders and putting in place adequate measures to cushion its effects on workers.

The NLC in a statement by its President, Joe Ajaero, on Tuesday noted with regret that a few hours after the pronouncement, some marketers had shut down their filling stations and immediately there was a price hike in many places.

It described the action as insensitive, noting that it had brought tears and sorrow to millions of Nigerians instead of the renewed hope the administration promised.

The NLC also said that President Tinubu’s pronouncement had devalued the quality of the lives of Nigerians by over 300 per cent.

The statement read in part, “We at the Nigeria Labour Congress are outraged by the pronouncement of President Bola Tinubu removing ‘fuel subsidy without due consultations with critical stakeholders or without putting in place palliative measures to cushion the harsh effects of the ‘subsidy removal’.

“Within hours of his pronouncement, the nation went into a tailspin due to a combination of service shutdowns and product price hikes, in some places representing over 300 per cent price adjustment.

“By his insensitive decision, President Tinubu on his inauguration day brought tears and sorrow to millions of Nigerians instead of hope. He equally devalued the quality of their lives by over 300 per cent and counting.

“It is no heroism to commit against the people this level of cruelty at any time, let alone on an inauguration day. If he is expecting a medal for taking this decision, he would certainly be disappointed to receive curses, for the people of Nigeria consider this decision not only a slight but a big betrayal.

“On our part, we are staunchly opposed to this decision and are demanding an immediate withdrawal of this policy.”

The also noted that the pronouncement would have ripple effects on the economic well-being of the people with serious implications on security.

“We wonder if President Tinubu gave a thought to why his predecessors in office refused to implement this highly injurious policy decision,” it stated.

 

NLC punctures FG arguments

It said, “Nigerians have a collective stake in the ownership of our oil resource held in trust by the government of the day. What we need then is the effective management of this scarce resource that will beget long-term prosperity to the suffering people of Nigeria and not the present racket in which those in power abuse access and control of NNPC and oil revenue to warehouse money to fund their election campaigns.

“This brings us to another inconsistency. On one hand, the government states the expenditure is unsustainable yet on the other it claims the amount now earmarked for the subsidy will be used to fund other people-oriented programmes. However, the two assertions cannot exist at the same time. If the subsidy is bankrupting us, then reallocating funds to different programmes will be no less harmful. A bankrupting expenditure retains this quality whether used for a subsidy or another purpose. Earmarking the funds to something else will not change the fiscal impact. If the government is sincere about using the funds for other programmes, then it must be insincere about the threatened insolvency.

“The concern about the government saving naira is purely superfluous. Officials cry that Nigeria will become like Greece. Those who say this disqualify themselves from high office by their own words. Greece sits in a terrible situation because it forfeited its own currency. Thus, it cannot print itself out of insolvency and it must save or earn euro to pay its bills. Because Nigeria issues its own currency, it does not face the same constraint…

“Again, we must rid ourselves of the old notion that government saving and budgetary surpluses are inherently good and that deficits are always bad. For government to save naira, that means it brings in more than it pays out. Where does this influx come from? It comes from you and me, the private sector. If the Federal Government saves more, it means the private sector will have less. Government surplus means private sector contraction. This shows that the administration has its priorities confused. It acts as if the people are there to help government run itself.

“The more beneficial relationship is that government should be giving people the help needed to better live their lives. The government’s position is akin to a wealthy parent demanding his young children bring home more food for him to consume than the parent gives them to eat. We would deride any parent for such meanness. Yet, this government believes this conduct is wise and prudent.

“Another argument government has presented is that removal of the subsidy will stabilize the exchange rate. This makes no sense. True, since marketers convert much of the naira from selling petrol gained into dollars, there is downward pressure on the exchange rate and foreign reserves. However, this pressure is not a byproduct of the subsidy.

“It is a byproduct of importation. With the subsidy lifted, the marketers will earn the same or more from the sale of petrol. For there to be less pressure on the exchange rate would mean the marketers would seek to exchange significantly less of the same amount of naira into dollars simply because the subsidy was removed..

“There is another “philosophical mystery” in the government’s position. They state the subsidy must be removed to end the unjust enrichment of the importing cabal. There is a major problem with this assertion. If this is truly a subsidy, there should be no unjust enrichment.

“A subsidy is created to allow the general public to pay a lesser price while sellers earn the prevailing market price. Subsidy removal should not increase or decrease the amount earned per litre by the suppliers. If the amount earned by the suppliers will diminish materially, what government had been operating was in part a pro-importer price support mechanism on top of the consumer-friendly subsidy. If this is the case, government could have abolished the unneeded price support while retaining the consumer subsidy.”