Subsidy removal: NLC warns increase in fuel price will affect transport costs, food prices

The Nigerian Labour Congress has warned that the planned removal of fuel subsidy and subsequent increase in fuel price will affect every facet of life, including transportation, cost of food items, clothing, housing and others.

This was disclosed by Mr Ikechukwu Nwafor, NLC chairman in Ebonyi, in an interview with the News Agency of Nigeria (NAN) on Friday in Abakaliki.

This comes after the Senate President, Ahmed Lawan had claimed that the removal of fuel subsidy was not a directive from President Muhammadu Buhari.

What the NLC is saying

Nwafor stated that It is high time Nigeria fixes its own refineries, adding that Nigeria can end the importation of fuel in the country if it can have the refineries working.

“We should understand that this is not the right time to increase the pump price when the cost of living is already difficult. Prices of food commodities are already beyond the capacity of civil servants.

“How will the civil servants, who are the engine of the economy, cope?

“What we are telling the federal government is to consider the consequences of the increase on the masses and the current economy,” Nwafor said.

He warned that the increase is going to affect every facet of life, including transportation, high cost of food items, clothing, housing, among others.

He also stated that the NLC Chapter in Ebonyi State plans to embark on a protest on January 27th, urging all Nigerians and Ebonyi state to rise against the removal of oil subsidy and hike on fuel price.

“Of course, the increase is going to affect all citizens and we are saying no to it,” he said

What you should know

Zainab Ahmed, the minister of Finance, Budget and National Planning had stated that Federal Government plans to remove fuel subsidy in 2022 and that part of the revenue that would be saved from subsidy removal will be used to service millions of households via the Conditional Cash Transfer programme.
The Governor of Kaduna State, Malam Nasir El-Rufai, has stated that Nigeria is losing N250 billion a month on petrol subsidies and that state governors are committed to supporting the Federal Government in ending the fuel subsidy regime.
The World Bank also stated that Nigeria spends $4.5 billion on fuel subsidies, indicative of 2% of GDP or 35% of oil and gas revenue. The global financial institution said Nigeria’s PMS subsidy imposes a massive and unsustainable fiscal burden. The cost of the PMS subsidy in 2020 rose from just 4 percent of the oil and gas revenues that are first transferred to the NNPC (US$0.3 billion) to a staggering 35% in 2021 (US$4.5 billion or roughly 2 percent of GDP) and that Nigeria’s average daily oil production fell from 2.0 million barrels per day (bpd) in 2019 to 1.8 million bpd in 2020 and less than 1.6 million bpd in the first nine months of 2021, its lowest level in two decades.
The Minister of Information and Culture, Lai Mohammed, has promised to consult with relevant departments and ministries in order to clarify the exact federal government position on the controversy surrounding the removal of fuel subsidy in 2022.
This week, the Office of the Vice President denied that the Yemi Osinbajo-led National Economic Council (NEC) recommended lifting the price of Premium Motor Spirit (PMS), otherwise known as petrol to N302 per litre, adding that there are ongoing discussions on the issue of fuel subsidy.
Meanwhile, the Nigerian Governors’ Forum (NGF) also announced that it will dialogue with organized labour groups in Nigeria over the expected removal of fuel subsidy.

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