Barely 24 hours to deadline, governors of the 36 states of the federation yesterday mounted pressure on organised labour to resolve the impasse occasioned by the threat to embark on strike tomorrow, if the federal government refuses to rescind the recent decision to increase the pump price of Premium Motor Spirit (PMS), otherwise known as petrol, and electricity tariff.
This was the outcome of an early morning dialogue between representatives of the Nigeria Governors Forum (NGF) and the Nigeria Labour Congress (NLC) as well as Trade Union Congress (TUC) at the residence of the chairman of the NGF and Ekiti State Governor, Kayode Fayemi, in Abuja yesterday.
Fayemi spoke for the forum, while the NLC president, Comrade Ayuba Wabba, who was accompanied by the TUC president, Quadri Olaleye and the NLC general secretary, Emmanuel Ugboajah, to the meeting, spoke for the organised labour.
Also at the meeting was the director general of the NGF, Asishana Okauru.
The chairman explained that governors decided to wade into the on-going negotiations with a view to broadening consultations and assisting to bring the impasse to an end, thus averting the impending strike action.
He pleaded with the NLC that the timing of the action was inauspicious and could aggravate an already worsening situation if not averted.
Fayemi emphasised that the plight of workers in the country was already in dire straits and that any action embarked upon by the union at this time would further worsen their situation as contained in the communiqué issued by the governors after their first emergency meeting on Thursday since the outbreak of the pandemic and eventual lockdown of the country in March.
The NGF chairman who said no one that was conversant with the prevailing situation in the country would disagree with labour and its demands as it were pleaded that governors be given time to consult more broadly with the various stakeholders, including the secretary to the government of the federation, Boss Mustapha, the vice president and the president.
This, he said, would be top priority for the NGF, just as he promised to head straight to the presidency once the meeting was over.
The governors’ forum chairman expressed hope that this gesture from the governors would also energise the leadership of labour to put on hold their planned action.
On his part, the president of the NLC said the federal government violated the time-tested global process of dialogue.
He thanked the NGF chairman for his efforts at ensuring that sanity returns to the negotiation table.
“When the cost of PMS rises, the cost of everything in the country rises with it”, the NLC president explained.
He agreed with the NGF chairman and also praised him for agreeing to broaden the mechanism for consultation on the matter, saying “I praise you for showing a good grasp of this matter and I believe that if they had widened the mechanism for consultation and involved people like you, we wouldn’t have come to this pass.”
In conclusion, Fayemi stated that Government and Labour were not that far apart in the negotiation and the differences are not irreconcilable.
The NGF chairman said, “Our President who is always on the side of workers will not be averse to the issues being raised and I’m hopeful for an amicable settlement on the issues highlighted.”
Sustaining Fuel, Electricity Subsidy Practically Impossible – Osinbajo
Meanwhile, Vice President Yemi Osinbajo insisted yesterday that sustaining fuel and electricity subsidies are practically impossible simply because the country does not have the resources.
This is even as he said the federal government will focus on developing Compressed Natural Gas, otherwise known as auto gas, which is priced significantly lower than PMS.
Osinbajo stated this during a virtual interactive session hosted by the Africa Report Magazine.
Answering a participant’s questions regarding the removal of petrol subsidy, the vice president said, “We have experienced a severe downturn in our finances over the years, so at 60 percent less revenue, we are in a position where sustaining fuel subsidies is practically impossible simply because we do not have the resources.”
“What we have decided to do is to focus on Compressed Natural Gas (CNG) which is about half the price of petrol today. So, if we use CNG for our cars and for our buses, it will cost between N78 and N80 or so per liter.
“Under the Nigerian Economic Sustainability Plan (NESP), the Federal Government’s objective is to promote domestic use of CNG and support the creation of 1 million jobs by maximizing the domestic use of CNG while reducing reliance on refined petroleum products like kerosene and Premium Motor Spirit (PMS)”.
Responding to a question regarding increase in taxes, the vice president noted that the Buhari administration has no plans of increasing taxes, stating that “our position really is that, this is hardly the time to raise taxes”.
He continued: “It is even more difficult for people to pay taxes now than ever before, I mean, given the state of affairs, but this is why we’re doing everything now.
“We are trying to ensure that businesses survive this period by providing as much support as we can, and by relieving them of as much burden as possible and ensuring that they are able to get some moratorium so that they can at least continue to run their businesses and by all the other interventions and support that we are giving, we hope that those interventions will help businesses.
“Our approach is first to ensure that we save jobs. If we save jobs and save businesses, and then do the best we can in agriculture, the housing scheme and all of that, we will actually be able to improve spending and if we are able to improve spending, taxes will definitely improve, and if businesses survive, taxes will improve. So, those are the sort of projections that we are looking at.”
It would be recalled that the 2020 Finance Act exempts businesses generating less than N25 million in annual turnovers from Companies Income Tax. Also, businesses with a turnover of between N25m and N100m will only pay 20% Companies Income Tax instead of the 30% which was the former applicable rate.
The vice president had recently said it was the plan of the Buhari administration to put money in the hands of Nigerians.
Addressing concerns raised about electricity tariffs, Osinbajo said the era of subsidising petrol and electricity was over, noting that government has adopted measures of addressing the situation.
His words: “What we are trying to do is to ensure that we are able to reform the electricity industry. The industry is privatized except for the transmission sector. But what we have seen is that the distribution companies (DisCos) are just not able to meet their targets or to even provide electricity on any kind of stable basis now.
“The DisCos have been hankering all these years for a cost-reflective tariff and the government has been paying the subsidy. In fact, in the past few years, we have spent about N1.3 trillion on subsidies for electricity. Again, here is a situation where that is completely unaffordable.
“We want to ensure that new companies come into the market. So, that will be decentralized completely. This way, in several parts of our country, we can have micro-grids, small grids, and all of that. We are doing 5 million solar connections as part of the Economic Sustainability Plan. We think that, with all these, we can electrify our country within a short period of time.”
The vice president added that the overall target of government in the Economic Sustainability Plan is to save existing jobs and revamp businesses by improving the spending capability of Nigerians through the various initiatives in industry, agriculture, mass housing, and the solar connectivity projects.
Over 1, 200 persons on different platforms across the world participated in the virtual event tagged by Africa Report, the organisers, as Digital Dialogues.
Ordinary Nigerians Will Benefit In The Long Run –Lai Mohammed
Meanwhile, the federal government yesterday appealed to organised labour to shelve its planned strike, saying it will only bring more hardship to ordinary Nigerians.
The Minister of Information and Culture, Alhaji Lai Mohammed, made the appeal in Lagos at a meeting with the Online Publishers Association of Nigeria
Mohammed, however, said the two necessary price adjustments in the petroleum and power sectors were inevitable because of dwindling resources as the country had lost 60 per cent of its revenue due to the COVID-19 pandemic.
He disclosed that the federal government spent N10.4 trillion on fuel subsidy from 2006 to 2009 and N1.7trillion to supplement electricity tariff in less than five years.
The minister reiterated that the government could no longer afford the cost of the subsidies, especially under the prevailing economic conditions.
He said, “Revenues and foreign exchange earnings by the government have fallen by almost 60 per cent due to the downturn in the fortunes of the oil sector.
“There is no provision for subsidy in the revised 2020 budget. So where will the subsidy money come from?
“Remember that despite the massive fall in revenues, the government still has to sustain expenditures, especially on salaries and capital projects”.
According to the minister, citizens are not the beneficiaries of the subsidy on petroleum products that has lasted for years.
Mohammed stated: “Between 2006 and 2019, a total of 10.4 trillion naira was spent on fuel subsidy, most of which went to fat cats who either collected subsidy for products they didn’t import or diverted the products to neighbouring countries where prices are much higher.
“Instead of subsidy, ordinary Nigerians were subjected to scarcity of petroleum products. They endured incessant long queues and paid higher to get the products, thus making the subsidy ineffectual”.
The minister added that due to the problems with the largely-privatised electricity industry, the government had been supporting the industry.
He continued: “To keep the industry going, the government has so far spent almost N1.7 trillion especially by way of supplementing tariff shortfalls.
“The government does not have the resources to continue along this path. To borrow just to subsidise generation and distribution, which are both privatised, will be grossly irresponsible”.
Mohammed added that in order to protect the large majority of Nigerians who cannot afford to pay cost-reflective tariffs from increases, only customers with guaranteed minimum of 12 hours of electricity would have their tariffs adjusted.
He said the industry regulator, Nigerian Electricity Regulatory Commission (NERC), would ensure that those who get less than 12 hours supply experience no increase.
In addressing the complaints about arbitrary estimated billing, the minister said that a mass metering programme is being undertaken to provide meters for no fewer than five million Nigerians.
According to him, the government is also taking steps to connect those Nigerians who are not connected to electricity at all.
“As you are aware, under its Economic Sustainability Plan, the government is providing solar power to five million Nigerian households in the next 12 months.
“This alone will produce 250,000 jobs and impact up to 25 million beneficiaries through the installation, thus ensuring that more Nigerians will have access to electricity via a reliable and sustainable solar system,” he said.
Reacting to the complaints on timing of the two adjustments, Mohammed said government is not insensitive to the plight of the citizens.
Explaining that the adjustments were just a mere coincidence, he said, “First, the deregulation of PMS prices was announced on March 18, 2020, and the price modulation that took place at the beginning of this month was just part of the on-going monthly adjustments to global crude oil prices.
“Also, the review of service-based electricity tariffs was scheduled to start at the beginning of July 2020 but was put on hold so that further studies and proper arrangements can be made.
“Like Mr President said at the opening of the last ministerial retreat, this government is not insensitive to the current economic difficulties our people are going through and the very tough economic situation we face as a nation.
“We certainly will not inflict hardship on our people. But we are convinced that if we stay focused on our plans, brighter and more prosperous days will come soon”.
He said the deregulation of the petroleum sector would save the country trillions of Naira which could be used to provide modern infrastructure for the benefit of the people.
Mohammed added that the deregulation would spur investments in the petroleum industry, especially in the building of local refineries which would result in lower fuel prices.
He also noted that the service-based electricity tariff adjustment and the ongoing work by German company, Siemens, to boost power supply in Nigeria would help end the perennial power problem in the country.
The minister thanked Nigerians for their understanding and appealed to them to bear with the government.