TUC opposes removal of fuel subsidy

The Trade Union Congress has expressed its opposition to the position of the 36 state governments that subsidy on fuel should be removed.
The state governments, through their Commissioners for Finance had last week mooted the idea of the removal of subsidy from petroleum products.
Their argument is that the subsidies are not directly beneficial to Nigerians.
They argued that the money realised from the removal of the subsidy should be shared among the three tiers of government for each tier to decide how to better impact on the lives of those residing in its domain.
But the Trade Union Congress on Sunday faulted this position.
The TUC in a statement said that the position of the states was wrong.
It argued: “The attention of the Trade Union Congress of Nigeria has been drawn to the reported resolution of the Forum of States Finance Commissioners, as stated by its chairman, Ebonyi State Commissioner of Finance, Hon. Timothy Odaah, calling for the removal of fuel subsidy in the downstream sector of the oil and gas industry. We particularly note his assertion that ‘the subsidy should be removed so that every state or any member of the federating unit sharing from FAAC will take its own money and determine how to use it or grant subsidy to the level that it can afford’.
“The commissioners’ argument is rather selfish and it shows the share-and-grab-the-money-and-run approach of the political elites, and we advise the government to completely ignore the position of the commissioner and his likes.
“It is sad that such pronouncement has come only a few days after the minister of petroleum, Dieziani Allison Madueke, stated publicly that government has no plan for subsidy removal. Indeed we would consider any attempt by the government to withdraw fuel subsidy any time soon as an act in bad faith and a breach of trust of the Nigerian people, especially workers. As far as we are concerned, the government exists for the people and their welfare and security should be of paramount concern to it. Fuel subsidy removal at this time and without considering the potential adverse effects on the masses is wrong and would amount to a betrayal.
“It may be recalled that in January 2012, the Trade Union Congress of Nigeria (TUC) and its sister labour centre, the Nigeria Labour Congress (NLC), civil society organisations and human rights groups, staged a resolute protest against subsidy removal, leading to a series of probe panels. We still remember how many of the people mandated by the government to probe the implementation of the subsidy regime later became the probed. The petroleum minister, Dieziani Allison Madueke, then told the world that the federal government had saved N879 billion generated from fuel price increase and reforms, and our advice was that the money should be re-invested in the building of viable factories, infrastructure and to finance quality education for our children. But up till today, and despite all government’s claims to the contrary, we are yet to see any concrete evidence that these things have been done. The challenge obviously comprises insincerity,
ineptitude
and lack of vision and political will, and these cannot take us anywhere as a nation.
“While the Congress is not totally against the removal of petroleum subsidy at some appropriate time in the future, we are of the view that this should be done only after several fundamental pre-requisite conditions have been met by the government. In the interim, we expect Hon. Odaah and his fellow chairmen and the executives at the state and federal levels to be more focused on initiating ways to generate revenue internally for their respective jurisdictions.
“Clearly the Finance Commissioners Forum did not address the issue of likely grave effects of their suggested policy on the poor masses, neither did it (forum) proffer any possible remedy to such effects. Indeed, it is instructive that since 1986 when the first subsidy removal debate was ignited, government has been unable or unwilling to get the withdrawal of subsidy on petroleum products right, simply because all debates on the policy were targeted at price increases instead of making a case for the creation of an enabling environment where market forces can inject efficiency and effectiveness into the downstream sector of the industry such that the engineered competition can eliminate the corruption and rent-seeking that the current structure and processes in the sector reflects. Already there is “artificial scarcity,” in the words of the petroleum minister, and petroleum marketers have cashed in on the present situation by shutting down fuel
stations in parts of the country.
“It is this misguided view of government that makes the subsidy withdrawal a continuously recurring decimal in our national economic discourse. The debate should therefore be focused on what needs to be done in the short and medium term and indeed the long term to ensure well managed deregulation and guarantee that competition is injected into the sector and the laws of supply and demand give Nigerians a realistic pump price in the medium term of less than the current pump price if crude oil prices were to remain at today’s prices. On our part we shall continue to resist until the right things are done.
“The government should also take steps to drastically reduce the high cost of governance at virtually all levels. It has a responsibility to challenge the institutional and structural imperfections in the system, take them on, fight them, defeat them and have a lean and fit system to bequeath to the people. If for nothing else, the structures, institutions, corruption and inefficiencies that threaten to swallow all of us like roaring lions in the sector are essentially creations of government. The government must therefore not shy away from taking them on and defeating them as a prerequisite to withdrawing from the sector. We also recognise that government will always have a presence in the sector as an umpire or a regulator.
“We further insist that, before the subsidies are removed, the government should ensure that our ailing refineries are rehabilitated and new ones built to ensure stable supply of petroleum products without recourse to importation.
“Government should, as a matter of urgency, ensure the passage and signing into law of the Petroleum Industry Bill which we believe would help solve the problems of both the downstream and upstream sectors of the petroleum industry, thereby optimizing the benefits to the people. In any event, it is imperative that Government make it clear to the people what the funds generated from subsidy withdrawal are being spent on.
“There is no doubt that our decaying infrastructure needs improvement. Rehabilitation of the roads and transportation generally – including the completion of the dredging of the River Niger – should also be done before the removal of subsidy.
“All said and done, we advise that government do away with the phrase “removal of petroleum product subsidy,” for now unless and until the needful preliminary measures cited above are fully adopted and implemented. Anything contrary will be viewed as attempt to further impoverish and enslave Nigerians, and shall be appropriately resisted as such. Meanwhile we remain vigilant. Those who have ears to hear, let them hear.”
The statement was signed by the President and Secretary General of the TUC, Comrade Bobboi Bala Kaigama and Comrade Musa Lawal.