Mr. Olaitan Philips, the Convener, "Lets Do It Right”, recalls that on December 7, the Minister of Labour and Employment had announced that PMS pump prices are to be fixed at N162.44 per litre effective December 14 after deliberations between the Ministry of Labour and Employment and Labour leaders.
Philips said that the announcement of the Minister of Labour indirectly means that Nigeria will soon be back to the era of petroleum subsidy.
According to him, the Government had spent over 10 Trillion Naira in the twelve years up to 2018, spending a staggering unbudgeted 1.1 Trillion Naira on petroleum product subsidy in 2019 alone.
"Many pertinent questions arise from this pronouncement by the Minister of Labour and Employment, Dr. Chris Ngige.
"Should petrol pump prices really be fixed by mere negotiations between the Government and Labour?
"The pronouncement was abrupt and unanticipated considering there were no consultations with the fuel distributors and the business community that this change of direction impacts.
"The negotiation between Government and Labour, arriving at a deduction of N5 does not take into consideration the current rise of international prices for petroleum products and the deteriorating foreign exchange rate," he said.
A Financial expert, Mr. Anderson Julius, was of the view that the approach of negotiating petrol pump prices between Government and labour without the involvement of investors further diminishes investor confidence, setting an unprofessional precedent that will be difficult to set aside when parameters that constitute the pump price of PMS rise again.
Julius, pointed out that while it is clear there are many Nigerians struggling with the economic downturn, loss of jobs and uncertainties for the future, a more direct intervention from the Government would alleviate the immediate challenges Nigerians are currently facing.
According to him, direct social programs in small and medium scale businesses which employ the majority of Nigerians would have a more immediate positive impact on Nigerians.
"Watching the Government move from having announced a policy objective and itemizing its several benefits and suddenly change its mind with this recent pronouncement under pressure from Labour, does not breed a lot of confidence in what government had said previously or its capacity to lead Nigeria out of this economic quagmire.
"This policy flip flop will obviously negatively impact investor confidence in government policies," he added.
A Financial Analyst, Mr Badru Sadiku, recalls that in April 2020, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), announced during a live programme on African Independent Television that the era of subsidy on petrol is gone forever, stating that with the current fluctuations in global crude oil prices, the cost of refined products would be determined by market forces going forward.
He had also explained that although NNPC was not responsible for petroleum products pricing, the country was transiting into a market situation where the forces of demand and supply would determine the cost of Premium Motor Spirit. Is subsidy coming back?
According to him, what about the massive corruption Government had said subsidies cause? Is eliminating massive corruption no longer important?
"Who benefits from this ‘subsidy fraud’? Are they the ones who have trapped us in this unending rigmarole?
"Who pays those salaries of employees in refineries that are not working and where does the money come from? Do these uneconomic decisions make sense? Can we not see how they are hurting us? Is there an adult in the room?
Sadiku said that Nigerians were promised a better deal with deregulation. Was the Government deceiving us then and what are they telling us now?
He said that Government had earlier stated that one of its major economic achievements was the successful deregulation of the downstream petroleum sector, opening the sector up for new investors to invest and improve the sector which will ultimately positively impact the Nigerian economy.
Our Energy Correspondent, National, reports that he reiterated that the promises made by Government must be tracked and the Government held to account.
Nigeria cannot keep dilly dallying as regards policies that will ensure the growth of the economy and the liquidity for the Government to be able to fix the mirage of problems and pains Nigerians are reeling from, he added.
This decision of the Government opens the door to huge loss of revenue and increased debt at a time it is most ill-equipped to make such expenditure, with the need for huge resources required to address the economic recession worsened by the COVID-19 Pandemic.
The Government has declared 2020 the year of gas and has through the National Gas Expansion Programme (NGEP) started the deepening of the use of gas across the country as alternatives to power and heating, power vehicles and cooking.
The gas expansion programme is a well thought out programme that will impact Nigeria and Nigerians soon.
This is a critical juncture for Nigeria and the right decisions need to be made to ensure a prosperous future.