AS the turbulence in the international oil market persists, President Umaru Musa Yar’Adua has directed two ministers to meet with organised Labour on how to strike a balance between the energy crisis and the well-being of Nigerians.
Yar’Adua’s order was contained in a letter written by his Chief of Staff, Maj.-Gen. Abdullahi Mohammed to the Minister of State for Energy (Petroleum), Odem Ajumogobia (SAN) and his counterpart in the Labour Ministry to convene a stakeholders’ meeting on the matter.
The government is believed to be itching for an increase in the prices of petroleum products.
The Guardian learnt that the meeting was consequent upon a letter earlier written to President Umaru Yar’Adua by the Nigeria Labour Congress (NLC) requesting for dialogue over a proposed price hike. The President in the letter reportedly directed Ajumogobia to ensure that the meeting reach a common position on how to handle the likelihood of domestic oil prices being eroded by the vagaries in the international market.
A source close to the NLC told The Guardian in Abuja at the weekend that the meeting would hold tomorrow, adding that the government was not unaware of the apprehensiveness of the Labour movement about the looming hike in the prices of petroleum products but it was being cautious about the possible social implications of any price-mark-up early in the year.
The letter to Ajumogobia also directed the Ministry of Labour to compile the names and contact the Labour leaders expected to feature in the parley.
Consequently, the ministry at the weekend stepped up its efforts to contact the Labour leaders expected at the meeting.
It was also learnt that NLC General Secretary, John Odah, who was abroad most of last week, would return in time to attend the meeting.
Even though the government is determined to stem the effect of oil price rise on the domestic scene through subsidy, which it says has become unbearable, it is nevertheless determined to find a way to check any social unrest that may trail the action.
In its New Year message, the NLC warned the government not to tamper with the current fuel price levels, saying even at the present rates, many Nigerians had been thrown off the social ladder and any increase could sign them into economic misery.
NLC President, Abdulwaheed Omar, said: “In 2008, the nation must be spared the vicious cycle of increases in prices of petroleum products. The NLC appeals again to the Federal Government to ensure that early enough in the year 2008, government and Labour should begin engagement with a view to sustaining (at the minimum) the current price levels well beyond the period stipulated in the June 23, 2007 agreement. In view of the escalating poverty level and the desperate state of productive activities, Labour will insist that there is no basis for price increase.”
A Labour leader, who sought anonymity, however, faulted the government’s argument that the rise of crude oil price had taken the level of subsidy out of its reach.
He said: “We in the Labour movement do not see the line of argument here. If the crude oil price is rising in the international market, are we supposed to be weeping or be shouting for joy? Are we not supposed to be different from those countries, which do not have oil? The simple logic is that more money is now available to the government to even subsidise local consumption even much more than it did in 2007 because there is more money to us now.”
The Guardian further learnt that the NLC and the Trade Union Congress (TUC) met at the weekend to draw up common position that the Labour would canvass at the meeting.
The Labour leaders reportedly agreed to press for the scrapping of Petroleum Products Pricing Regulatory Agency (PPPRA) and Petroleum Equalisation Fund (PEF).
They allegedly argued that the PPPRA has no specific jobs that a department in the Federal Ministry of Energy cannot assume ditto for PEF.
They said that the claim by PPPRA that it does quality control on imported products had been disputed by Senator Bassey Henshaw, former Chairman of the Senate Committee on Labour. This claim was also disputed by the NLC at a public hearing organised by the Senate Ad-hoc Committee on Petroleum Products Prices last year.
The Guardian was informed that the PPPRA and PEF also contributed to the overhead costs of fuel in the country.
The source said that both the PPPRA and PEF get certain percentages from the current N70 per litre of petrol to fund their agencies without contributing to the efficiency of the distributing channels. He added that PEF was out of tune with the reality in Nigeria as there was no price uniformity to warrant its existence.
It is the opinion of Labour that the scrapping of these two agencies will further push the level of government subsidy downwards, which will inevitably result in price reduction.
Relatedly, the Petroleum Equalisation Fund (PEF) management board and major oil marketers will converge in Lagos on Thursday to fine-tune efforts at achieving products supply throughout the country.
The News Agency of Nigeria (NAN) said that the stakeholders’ meeting would find solutions to hitches in products haulage and chart the way forward for improved co-operation and service delivery.
“PEF’s Executive Secretary, Adefunke Kasali, will lead its management to meet with chairmen and chief executives of oil companies, led by Oando’s Managing Director, Wale Tinubu”, a source said in Abuja at the weekend.
The source said that this would be the high point of a series of dialogue to smoothen the working relationship between the board and the oil marketers.
He added that the meeting would also discuss debts owed the stakeholders as well as the mode of collection of haulage claims by the PEF.
“PEF’s allowances are being collected by the Nigerian National Petroleum Corporation (NNPC) and remittances made to PEF are usually delayed because of bureaucracy.
“We are considering direct collection of the claims so we can have the capacity to pay the marketers’ claims faster or as and when due”, the official explained.
The parley, the source said, would enable the parties to reach an agreement on the framework for the reconciliation of all outstanding claims based on fuel lifting by marketers.
“Since January 2007, the marketers have paid no money to PEF because they believe it created delays in payments due them, and that have also hampered PEF’s ability to pay the marketers’ claims accordingly,” he stated.