Amid the economic crisis generated by the ongoing United States and Israel war against Iran, Trade Union Congress (TUC) advised the federal government to subsidise the crude oil being supplied to Dangote refinery and other local refineries to help check the skyrocketing fuel price in Nigeria.
Addressing a press conference in Abuja on Thursday, TUC president, Festus Osifo, said one of the issues generating concern among Nigerians was the rising cost of petroleum products arising from the war.
Osifo stated, “We are seeing that the cost of petrol is heading towards N2,000 per litre, depending on which the part of the country.”
He added that the situation had compounded the already harsh economic conditions facing Nigerian workers.
He said the union had considered the issues involved and was proposing that the federal government and the subnational governments should agree to subsidise crude oil being supplied to the Dangote refinery and other local refineries.
The TUC president said since the country was currently witnessing a revenue windfall as a result of the Middle East conflict, the government could deploy 60 per cent of the excess oil revenue to subsidise crude oil prices for local refineries.
He said that will go a long way in reducing the cost of production at the refineries, thereby cutting the prices of petroleum products in the domestic market.
Osifo, who was flanked by TUC Secretary-General, Dr. Nuhu Toro, and other executive members, said, “You could recall that the budget that was just passed by the National Assembly, they pegged the crude oil price at $64.85 per barrel.
“What I mean is that whenever the crude oil price goes much more than the projected benchmark in our budget, what will happen is that it leads to excess fund, right? It leads to excess money.
“So, this excess money, you know, is being shared consistently in the Federation Account by the three tiers of government.
“But what we are saying is that if you budget, if you accept that the benchmark is $64.85, any excess above that” should be used to subsidise crude supply to local refineries.
Osifo explained, “So that means when the crude oil price goes up above that benchmark, we will pay more at the pump price.
“So let government take that excess fund that was never budgeted for, take at least 60 per cent of that excess fund, then use it to subsidise the crude that is being supplied to Dangote refinery or other modular refineries in the country.
“And when that is done, the cost of production will reduce. So when the cost of production reduces, then it means that the pump price of fuel is also going to reduce.
“So, If, for example, on a daily basis that crude is sold for, let’s say, $100 per barrel. The difference between $100 per barrel and $64.85 is around $35.15. So, 60 per cent of it may amount to around $20. You use it to subsidise and to augment the price with which you supply crude to Dangote refinery.
“So, with that, you are enabling and subsidising production.”
Osifo said it was easier to monitor and implement subsidy on crude oil supply to local refineries than manage subsidy on fuel supply.
He also said TUC will want the federal government to take measures to shore up the naira as way of bringing down the current inflation.
According to him, TUC believes that Naira is currently undervalued, which is why the country is witnessing galloping inflation with cost of living getting higher by the day.
The TUC president suggested that government should endeavour to commence the process of salary review this year so as to conclude negotiation on time.
He said the union was also in support of the agitation by other unions for the governments to approve a wage award for workers to cushion the effects of economic crisis.
Osifo spoke on other issues bordering on the state of the nation, including insecurity, which is undermining the stability of the country.
He said the federal government should take more effective measures to tackle insecurity and bring an end to the massacre and killings of innocent citizens by terrorists.
Onyebuchi Ezigbo
