In the face of ongoing debates about fuel subsidies, experts and industry stakeholders are challenging the Nigerian government’s assertion that it has ceased subsidizing petrol. The controversy deepens as the National Petroleum Corporation (NNPC) maintains a monopoly over product importation, raising critical questions about the true nature of the market’s deregulation.
According to a report by The Guardian, Festus Osifo, the current president of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), recently underscored this issue. He highlighted the inconsistency in petrol prices across states and noted that the current prices do not reflect the global crude oil price, which is approximately $89 per barrel, significantly up from $70. He implies that the government is bridging the gap, thus continuing indirect subsidies.
Moreover, the dilemma extends beyond mere pricing. True deregulation falters when the NNPC is the sole importer of petroleum products. Various companies hold import licenses, yet none utilize them due to foreign exchange accessibility challenges, thwarting competition, and market-driven pricing expected in a deregulated system.
Osifo argues that recognizing the citizens’ economic struggles, the government hesitates to enforce a complete subsidy removal, which could see fuel prices skyrocketing to around N800 per litre, potentially triggering social unrest. However, he criticizes the government’s lack of transparency in communicating these issues, urging more openness regarding any ongoing subsidies and a comprehensive strategy before full deregulation.
The strategy, he suggests, should involve massive investments in public transportation, including transitioning to Compressed Natural Gas (CNG) and expanding efficient mass transit systems. This approach requires collaborative planning between federal, state, and local governments.
As labor negotiations continue, Osifo presses for a broad focus on education and healthcare, where heavy investment is crucial. He points out the high educational costs borne by oil workers, who often seek institutions abroad due to the shortcomings of the domestic education system. He believes that revamping public education can retain this capital within Nigeria.
Addressing unemployment, Osifo critiques the government’s lofty promises, such as significant job creation through projects like the Ajaokuta Steel Company. He advocates for a foundational shift in education, emphasizing entrepreneurship and technical skills, which are currently overshadowed by traditional academic pursuits.
Moreover, the issue of casualization in the workforce, particularly in the oil and gas sector, poses additional challenges. Osifo calls for organized labor structures for casual workers, urging the Federal Ministry of Labour to enforce regulations transitioning long-term casual workers to permanent staff. He identifies a systemic solution in labor organizations and government support to enhance worker satisfaction and productivity.
This complex situation in Nigeria’s petroleum sector underscores the need for a multi-faceted approach. It demands government transparency, policy consistency, and strategic investments in social services, echoing experts’ call for a holistic response to the intertwined issues of subsidies, education, and labor rights.
