Nigeria’s Trade Union Congress (TUC) has urged the federal government to immediately slash domestic pump prices of fuel, on the back of the slump in global oil prices.
According to TUC a cut in pump prices of fuel and diesel would reduce the effect of the devaluation of naira which was triggered by the slump in global oil prices and oil revenues — on businesses and manufacturing companies.
“ Federal government has refused to reduce the prices of petroleum products even though the price of crude has collapsed in the international market, which was the reason given when it wanted to increase the price of fuel in 2012,” the TUC said — referring to when the government fixed the current fuel price of N97 ($0.58)/litre.
Pump prices however still varies from state to state with the federal capital Abuja and Lagos maintaining a pump price of N97.
“Fuel pump price went up to about N130 during the petrol and gas workers strike late last year,” a source in Makurdi, Benue State said on Thursday in an interview with Business Day.
“Today we are buying at N105 – N110”, the source added.
Oil slumped by 48 percent last year, the most since the 2008 financial crisis, as the U.S. pumped at the fastest pace in more than three decades and the Organization of Petroleum Exporting Countries (OPEC) decided to maintain its output ceiling.
The federal government had then cited rising costs of subsidizing imported fuel due to high crude prices.
“We urge the government to direct the appropriate agency to immediately adjust the prices of petroleum products, as it will ameliorate the suffering of the Nigerian masses,” the TUC said.
It was worried that the continued impact of rising energy costs on businesses might trigger job cuts.
Nigerian businesses, through the Lagos Chamber of Commerce and Industry (LCCI), have said that operating costs have been ballooning on account of the devalued currency and high fuel costs on December 29.
Nigeria imports more than 80 percent of its fuel needs, and the government which subsidizes these fuels to keep domestic prices low, has already slashed its budget for imported fuel in 2015 to N200 billion, from more than N900 billion budgeted in 2014 due to the drop in global crude prices.
The federal government attempt to end the subsidies in January 2012 sparked a week of strikes and protests, paralyzing the economy and forcing the government to partially restore them.
The country’s main opposition party, All Progressives Congress (APC), in a statement on Sunday had also called on the government to follow in the footsteps of fellow oil-producing West African neighbour Ghana, to slash fuel prices.
The country’s main opposition party, APC, said the federal government no longer has any reason to keep the current price of fuel put in place since 2012.
“The oil price has fallen by 49 percent from 2013 prices and Jonathan’s administration still claimed it spent a whooping N971 billion on its subsidy payment in 2014. Does it mean that Nigeria has been buying refined petroleum products at the same rate from nations with functional refineries, despite the crash in crude oil prices?” the party questioned.
With the recent Oil price fall, the Federal government is expected to have reviewed the pump price in line with the global oil market price.
Oil fell below $50 a barrel in London for the first time since May 2009 amid speculation that U.S. inventories will increase, exacerbating a global supply glut that’s driven prices to a five-year low.
Fuel imports are one of the key sources of foreign-currency demand pressure. The naira currency has declined about 14 percent since last year against the dollar, making it the worst-performer after Ghana’s cedi out of 24 countries in Africa.
Josephine Okojie
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
