THE Trade Union Congress of Nigeria (TUC) has urged the Federal Government to introduce a special FOREX scheme to Dangote Refinery at a rate lower than the official market rate, targeting to reduce fuel prices for Nigerians.
About three weeks after the government increased fuel prices, a further hike was announced on Wednesday, despite the growing hardship faced by the population as a result of previous price increases.
Speaking at a press briefing in Abuja on Thursday, TUC president, Comrade Festus Osifo, lamented that the removal of fuel subsidies marked the beginning of Nigeria’s current economic challenges.
He argued that no government globally neglects critical sectors of its economy, emphasizing the need for state intervention in the energy sector.
Osifo outlined the three key principles of energy security: availability, accessibility, and affordability, explaining that offering foreign exchange to the Dangote Refinery, in effect subsidizing production, would not only lead to lower fuel prices but also create employment and improve operational efficiency in the oil and gas sector.
He said: “If energy is not available, even at a reduced price, the market will suffer from distortions, leading to speculation. Availability is crucial. The current scarcity and long queues, even after price hikes, stem from the lack of supply.
“Affordability is vital because Premium Motor Spirit (PMS) is a commodity used by every Nigerian, especially given our electricity issues.
All classes of Nigerians-rich, middle class, and poor depend on this product for survival.
“The main affordability challenge is the exchange rate. If the sector was fully deregulated and the exchange rate rose to N1,200 per dollar, PMS would sell below N700 per litre, especially with the Dangote Refinery in operation.
“Experts worldwide agree that the naira is undervalued.
We’ve been warning since April about the potential dan-gers, urging the government to strengthen the currency.
This issue affects more than just PMS-
most of what we consume in Nigeria, including food and fertilizer, is imported.
“We are still advocating for government intervention in the sector by providing forex to the Dangote Refinery at
N1,200 per dollar. This would drive PMS prices below N700 per litre.
“Our demand is for the government to establish a special forex scheme specifically for this purpose. There is no government in the world that does not intervene in critical sectors.
“In this case, the energy sector is crucial. We cannot leave it to the volatility of the naira. If the government makes this special interven-tion, PMS prices will drop below their previous levels.” Addressing the question of forex intervention when the government sells crude to Dangote in naira, Osifo explained, “Crude is traded globally, so you must convert its price from dollars to naira. The issue is what exchange rate you use.
“If the government intervenes, it’s not subsidizing consumption but subsidizing production, which would enable Dangote Refinery to employ more Nigerians and operate more efficiently.
This would bring PMS prices down to where they were in June of last year.”
Osifo also revealed that Dangote Refinery currently produces an average of 8 million litres of fuel per day, which he described as inadequate for Nigeria’s daily consumption of at least 35 million litres.
To address this shortfall, he urged the Federal Government to issue licences to marketers, allowing them to source petroleum products from the Dangote Refinery, rather than depending solely on the Nigerian National Petroleum Company Limited (NNPCL) as the sole distributor.
“As things stand, we want the government, through the Nigerian Midstream anc Downstream Petroleum Regulatory Authority (NMDPRA), to grant licenses to all marketers so they can source products from the Dangote Refinery. If Dangote can provide the 35 million litres we need daily, all marketers should have access to it and distribute it across the country.”
He also sought clarity on Dangote Refinery’s current production capacity.
“While its capacity is said to be 650,000 barrels per day, which translates to about 50 million litres of fuel, what is its actual output today? Can it meet the nationwide demand? Producing fuel is one thing, but evacuating it is another.
“Even if Dangote Refinery reaches 35 million litres per day, do we have the capacity to evacuate that amount daily?
We call on regulators to provide clarity.
“If the country cannot meet demand with domestic pro-duction, we urge the government to speed up approvals and provide necessary support to help Dangote Refinery ramp up production to exceed 40 million litres per day.
“If Dangote Refinery’s current output is only 15 million litres, while efforts to boost production continue, we are demanding that the government source the shortfall from other suppliers until Dangote’s output is sufficient to meet national demand.” The TUC) has also asked the Federal Government to reverse the pump price of petrol to what it was in June 2023 to alleviate the suffering of Nigerians.
Its president, Comrade Osito, made the demand on Thursday.
“We want the price of petrol to go even lower than what it was before June 2023,, he said.
Since June 2023, petrol prices in Nigeria have surged, with the Nigerian National Petroleum Company Limited (NNPCL) increasing rates from N184 to N998.
“We are calling on the Federal Government, through the Nigerian Midstream and Downstream Petroleum
Regulatory Authority (NMD-PRA), to grant all marketers licenses to lift petrol from the Dangote Refinery,” Osifo added.
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