- Stakeholders Highlight the Economic Implications and Urge Dialogue for a Lasting Solution
As the Nigerian Labour Congress (NLC) prepares for a nationwide strike, major players in the oil and transportation sectors, including the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), National Association of Road Transport Owners (NARTO), and Major Oil Marketers Association of Nigeria, have expressed their opposition to the strike. They stressed the urgent need to end the fuel subsidy regime and highlighted the enormous debt owed to the Nigerian National Petroleum Company Limited (NNPCL).
Members of these associations argued that the over N13 trillion spent by the Federal Government on fuel subsidy could have been allocated to the development of other critical sectors of the economy. They pointed out that the Nigerian National Petroleum Company Limited, through which the government manages the subsidy, has exhausted its funds to sustain the regime. The current subsidy debt stands at over N2.8 trillion.
Mele Kyari, the Group Chief Executive Officer of the NNPCL, recently disclosed that the Federal Government still owes the company N2.8 trillion, representing the amount spent on petrol subsidy. Oil marketers and transporters firmly believe that the NLC’s proposed strike will not address the situation but will exacerbate the hardship faced by the nation.
If fuel subsidy continues, experts predict that Nigeria’s petrol subsidy spending will rise to approximately N20 trillion when the projected N6 trillion earmarked for subsidy in 2023 is added to the N13 trillion already consumed between 2005 and 2021.
Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria, emphasized that the country has already expended over N13 trillion in subsidizing petrol, detrimentally affecting key sectors of the economy. He urged the NLC to allow room for dialogue, asserting that oil marketers will not shut down their filling stations during the NLC’s industrial action.
Gillis-Harry stated, “PETROAN’s position is that the NLC should be patient and explore all possibilities for reasonable discussion. Nigerians are the ones who will ultimately suffer; they are already suffering. Subsidy removal is a difficult decision, but it must be made, and PETROAN supports that. Can you imagine spending N13 trillion on subsidies over 16 years? Do you realize what that amount of money could have achieved for the country in terms of infrastructure, health, education, and more?”
He urged the Federal Government and the NLC to proceed with discussions, while stakeholders in the downstream sector also seek to reach an agreement with oil marketers. Gillis-Harry emphasized that all participants in the sector, including labor unions, should focus on finding solutions rather than resorting to threats.
Responding to inquiries about whether some oil marketers might be tempted to join the strike, Gillis-Harry categorically stated that PETROAN would not participate, as doing so would further worsen the hardships faced by Nigerians.
Yusuf Othman, President of the National Association of Road Transport Owners, expressed support for the full deregulation of the downstream oil sector. He recalled President Tinubu’s inaugural address, where he called for an immediate halt in the payment of subsidy on petrol. Othman acknowledged the need for palliative measures in the absence of subsidies but urged Nigerians to exercise patience and trust the government’s plans. He argued that the subsidy regime primarily benefited a select few, whereas the majority of Nigerians bore the brunt of its consequences.
As the NLC’s strike plans approach, the divide between labor unions and stakeholders in the oil and transportation sectors widens.
The opposition from major oil marketers and transporters reflects their belief that ending the fuel subsidy is crucial for the country’s economic growth. However, the NLC remains determined to push for its demands, and the outcome of these conflicting interests will significantly impact the future of fuel subsidy and the nation’s economy.