People & Money

NLC Dismisses Dangote Refinery as “One Man’s Enterprise”, Criticises New Fuel Price Hike

The NLC is criticising the position that the Dangote Group is soon to assume as the sole supplier of petroleum to Nigeria, an outcome it has ceaselessly worked for by resisting the liberalization of fuel prices which would have seen other investors set up refineries or operating sold government refineries”.

The Nigeria Labour Congress, NLC, on Monday kicked against the recent increase in price of Premium Motor Spirit, otherwise known as petrol, stressing that it is queer for the government to depend on the enterprise of one man to fix Nigeria’s downstream petroleum subsector.

Africa’s richest man, Aliko Dangote, is building the continent’s biggest oil refinery which  his group has said will be ready by the end of 2020. The company expects to start producing fuel within two months of the completion of the refinery

Dangote Refinery will transform Nigeria from a fuel importer into a net exporter. The refinery has a capacity of 650,000 barrels per day (bpd) while Nigeria  consumes 428,000 bdp.

Also Read: Dangote Refinery Reaches 80% completion, to Start Selling Petrol Next Year

The Petroleum Products Marketing Company, PPMC, a subsidiary of the Nigerian National Petroleum Corporation, NNPC, las week increased the ex-depot price of PMS to N155.17 per litre from N147.67 per litre.

Following this development, the National Operation Controller, Independent Petroleum Marketers Association of Nigeria, IPMAN, Mr Mike Osatuyi, said; “The implication of the increase in the ex-depot price is that there is going to be an increase in the pump price. We are expecting the pump price to range from N168 to N170 per litre”.

Reacting to this development on Monday, the Nigeria workers’ union stated that the price hike is against what the Organized Labour agreed with the government at the last negotiations after the last fuel price increase.

The NLC, in a statement signed by its President, Comrade Ayuba Wabba, asserted that Nigerians cannot be made to bleed endlessly for the failures of successive governments to make the nation’s refineries work.

The statement reads: “While we await the full recovery of our refineries as contained in our agreement with government, Nigerians cannot be made to bleed endlessly for the failures of successive government to properly manage our refineries, ensure value for money for the numerous Turn Around Maintenance (TAM) which were poorly and barely executed and the horrifying lack of interest in prosecuting public officials and private business people who have profited from the rot in our petroleum sector and the collective misery they have imposed on the general population”.

The NLC insisted in its statement that the FGN should continue to operate its refineries so as to make the pricing of petroleum competitive. One of the ways the NLC thinks the government could attain the so far impossible objective of successfully operating refineries is to declare a “state of emergency” in the downstream sector.

The Labour movement has for more than three decades contributed to preventing the development of a vibrant local refining industry by blocking attempts to end Nigeria’s costly fuel subsidy regime.

Not having clarity on whether locally refined petroleum would have to be  sold at the subsidised price i.e. below cost, investors shied away from building refineries in Nigeria.

The Dangote Group, which some Nigerians regarding as  managing to orchestrate a near monopoly in industries of interest and for openly canvassing protection against imports, invested $15 billion in building its Lekki refinery even with the uncertainty about pricing.

Also Read: How Many Jobs Can Dangote Refinery Actually Create?

A Nigerian analyst who spoke to Arbiterz anonymously is of the opinion that Mr. Aliko Dangote made the investment knowing that given the depth of his political connections, he would be able to get whichever party or group of politicians who may be ruling Nigeria whenever his refinery is complete to abolish the fuel subsidy.

Whatever the case, bold gamble or confidence in his political influence, Mr. Dangote’s bet has paid off. Due to the economic impact of the new coronavirus pandemic which crushed demand for oil and thus Nigeria’s revenue, the government was forced to abolish the fuel subsidy in April 2020.

The NLC is criticising  the position that the Dangote Group is soon to assume as the sole supplier of petroleum to Nigeria, an outcome it has ceaselessly worked for by resisting the liberalization of fuel prices which would have seen other investors set up refineries or operating sold government refineries.

The Dangote Group bought two refineries in a privitisation in the last days of former President Olusegun  Obasanjo’s administration in 2007 but the sale was reversed by his successor, late President Musa Yarasua, almost immediately he took office.

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