Fuel Price: Omar vs. Umar

[Robot]

It is poetic justice of sorts that the Umar Yar'Adua administration is beginning its te...Read the full article.

[naijalove]

You spoke too soon with Mister :-)

Labour Suspends Strike

Labour paid tribute to President Yar’Adua for the “statesmanship he has demonstrated,” noting that “it is impressive that he has risen beyond the temptation to dismiss the strike and use draconian measures, as would have been the case in the past.”

The nationwide strike called jointly by the Nigeria Labour Con-gress (NLC) and the Trade Union Congress (TUC) to protest increases in prices of petroleum products and the Value Added Tax (VAT), among others has been called off. By this development, all business premises, factories and public offices were expected to resume normal operations effective midnight yesterday.
The call off of the four-day old strike followed the sealing of an agreement by representatives of labour led by President of NLC, Adbulwahed Ibrahim Omar, President of TUC, Mr. Peter Esele and Secretary to the Government of the Federation, Ambassador Baba Gana Kingibe, representing the Federal Govern-ment.
A personal appeal by President Yar’Adua via a letter to Labour was said to have broken the ice between both parties and led to softening of positions that eventually paved way for the resolution of the dispute. (See full text of President’s letter on Page 8).
A joint statement signed by Omar, Esele and Kingibe at the end of the concluding meeting in Abuja yesterday endorsed the reversal of the N10 per litre increase in the prices of kerosene and diesel.
But the N10 per litre increase in the pump price of petrol was reduced to N5 per litre, meaning that petrol will continue to sell at N70 per litre, which concession the Federal Government had made in the wake of the strike.
The 10-point statement read by former Managing Director of Federal Mortgage Bank and Presidential Aide-designate, Alhaji Tanimu Yaqubu Kurfi, however, assured “there will be no review of this new price level of N70 per litre for petrol for the next 12 months.”
Other agreements reached between Organised Labour and the Federal Government include:
•The increase in the VAT (Value Added Tax) rate from 5% to 10% is revoked. VAT rate is now reverted (to) 5%.
• Government will set up an expert Committee to examine the pricing mechanism of petroleum products and make recommendations, bearing in mind the strategic nature of the products and the impact of their price levels on the economy and the social life and livelihoods of Nigerians. Both the NLC and TUC would be represented on the Committee.
•Government will establish an Expert Committee to examine the recent privatisation/concessioning exercises, especially the sale of the 51% Government equity in the refineries and the proposals for the power sector. Labour will fully participate in the work of this Committee.
•Government will implement the 15% salary increase for Federal Employees with effect from 1st of January, 2007. The modalities for spreading the payment of the arrears for the first quarter will be worked out by Government.
•No staff or worker shall face disciplinary action arising from their participation in the strike action.
•In the spirit of the strategic partnership between Government and Labour enunciated by President Umaru Musa Yar’Adua in his letter of June 23, 2007 to the NLC and TUC, both sides futher agree(d) on the need for a mechanism for structured, proactive and routine interaction between Government and Organised Labour towards a qualitative development process.
Organised labour alluded to the role played by the President’s letter in its own statement yesterday calling off the strike.
The statement signed by Omar and Esele, Presidents of NLC and TUC respectively said that additional impetus for its interest in dialogue and “finding the middle ground was provided by the personal appeal made by President Umaru Musa Yar’Adua.”
It noted that the appeal by Yar’Adua was backed by “an additional concession made by the Federal Government, in the form of a guaranteed moratorium on future price increase for one year.”
The NLC and TUC said that virtually all its objectives for embarking on the strike including the “withdrawal of the one hundred per cent increase in VAT, which has since taken effect in many sectors; the implementation of the 15% increase in salaries with effect from the 1st of January 2007, with a proviso for the payment of the arrears; complete reversal of the price of diesel and kerosene; and revisiting of the privatisation of the refineries,” have been achieved.
It observed that by the additional agreement to ensure that there would be no further increases in the price of petrol for the next one year, the “Federal Government has brought in renewed goodwill to its engagement with labour.”
Organised labour said that it was also motivated to suspend the strike following appeals for moderation and compromise made by Nigerians including leadership of the National Assembly, traditional and religious leaders, the media, social movements and millions of its countrymen and women.
“We were also conscious about the need to manage our concerns and demands in a way to minimise the adverse impact of a strike on the public and the economy,” the NLC and TUC said.
Consequently, labour directed workers to resume work with effect from Monday. It, however, said that all places hitherto shut down can re-open immediately.
The NLC and TUC while apologising to those who may have suffered “momentary loss of income,” said that “we must remain strenghtened in our conviction that we need this kind of collective action and solidarity to end bad governance.”
It noted that good governance cannot evolve if the citizens do not impose control over leaders through strikes and protests, among others.
It hailed Nigerians from all backgrounds for their support and participation and the sacrifice and understanding they showed over the four days of the strike.
Labour paid tribute to President Yar’Adua for the “statesmanship he has demonstrated,” noting that “it is impressive that he has risen beyond the temptation to dismiss the strike and use draconian measures, as would have been the case in the past.”
Labour particulary singled out for commendation some eminent Nigerians who offered to intervene in the crisis including Senate President, Senator David Mark, Speaker of the House of Representatives, Mrs. Patricia Etteh, Sultan of Sokoto, Alhaji Saad Abubakar, former NLC President, Comrade Adams Oshiomhole and lawyer and rights activist, Chief Gani Fawehinmi (SAN).
It appealed to businesses in both the formal and informal sectors, who have increased their prices and tariffs to return prices to the level of 5% VAT in compliance with the agreement.
Labour expressed its determination for continued partnership with Government to ensure successful implementation of all agreements reached.
In particular, Organised Labour called on relevant state governments to take immediate steps towards the implementation of the 15% salary increase in line with the agreement.
Kingibe while reviewing the events of the past four days, decried the colossal waste arising from the nationwide strike. While acknowledging that there were no winners or losers between the Federal Government and Labour, he, said Nigerians and the economy are the real losers.
President of NLC, Omar said that the only panacea to incessant strike action is continous engagement between Government and Orgsanised Labour.
The TUC President, Esele said the events of the last four days were not meant to inflict pains or hardship on the people, but to make “our country better.”
He said it was gratifying that Government thought it wise to establish a broad-based Committee that will examine petroleum product price variations.
THISDAY gathered that as at early yesterday morning, the government was ready to dare labour because some top officials of the Presidency were not happy that labour shunned the overtures made by government through the series of concessions announced Wednesday night.
Government backed down from its ‘no-more negotiation stance’ following the intervention of Senate President David Mark, Speaker Patricia Etteh and former NLC President, Adams Oshiomhole, all of whom held series of discussions with both sides at different times.
Oshiomhole was said to have had long discussions with his former colleagues in the labour during which he shared his experiences with them. He was the one who later appealed to government to re-open discussions with labour.
When contacted to comment on the suspension of the strike by labour and the promise made by the President not to increase fuel price in the next one year, Chief Rasheed Gbadamosi, Chairman of PPPRA asked, “What happens if crude oil hits $200 who foots the bill?
THISDAY: Maybe government
Gbadamosi: Ha! (Laughs) ok. Alright.
THISDAY: What is your reaction on the impact this strike has had on the economy?
Gbadamosi: My dear, some people have done the computation based on the GDP you must have seen the figures yourself but I am not an econometrician (laughs). What someone has done on a streamline basis is to take the GDP figure for the entire country and then do some apportionment whereby the shut down all the sectors that must have been affected and then use the rule of the thump and then knock off that portion of it. You deduct what you think is the fallout from the GDP and then calculate the loss for three days based on the days the strike lasted”.
Labour and government have been locked in disagreements over the price of fuel currently on N70. While Labour insisted it must come down to the former N65, government however insisted having made concessions on VAT and wages for its employees, it could no longer bend backwards.
Meanwhile, Associated Press reports that oil settled back above $69 a barrel and gasoline futures also rose Friday on concerns about Iran's nuclear capabilities and on news that talks to end a general strike in Nigeria had failed.
The news about Iran and Nigeria sent light, sweet crude for August delivery up 49 cents to settle at $69.14 a barrel on the New York Mercantile Exchange, and gasoline for July up 4.01 cents to settle at $2.2868 a gallon.

[nf5kmw1]

The only way to stop and even reverse fuel prices is to change strategy. Talking about price will not change the situation on the ground. Labour needs to take a proactive stands on energy strategy... I will like to see a demonstration for building refineries than waiting for the government to increase prices and having strikes....this is getting old!!!!


For most of the people who are “privatization supporters”, the believe that private companies only will solve our oil needs at point in time is being unrealistic. After 8 years, 240% increase in price (N11 to N65), 17 licenses granted, zero refineries working and total dependent import. We must say that the Energy policy has been a failure. In most places the people responsible for this failures and continuing to push this failed approach would have been fired at year 2.



This could be a hardline!!! if Nigerians as a whole and labour help change the strategy....
More info at http://nigeriansfor50000mw.com/

"President Yar’adua Reduces Fuel To N7 Per litre, Nigeria's Economy Grows by 12%”


How did he do it? He listened to a different approach because the approach of the last 8 years was a failure!!!
They say imitation is a form of flattery. If so, Nigeria needs to look to Venezuela to reform its fuel sector. Due to the policies of Venezuelan oil company PDVSA, the Venezuela are able to enjoy $0.19 per gallon or N6.12. The Venezuelan oil company, PDVSA, had decided that it was not the the crude oil export business but in the global petroleum and chemical business. So they invested in refining and retail business in Venezuela and almost all their export markets. These market include Europe, Caribbean, South America, Caribbean, Canada and United States. "PDVSA is among the leading corporations in the refining business, with a petroleum processing capacity of 3,285,000 barrels a day (1,285,000 barrels a day in Venezuela and 2 million barrels a day outside the country) through 24 refineries: six complexes in Venezuela, one in the Caribbean, eight in the United States and nine in Europe.
I would advice the New President to seek counsel of the architects of PDVSA and also look to what Mr. Putin in Russia is doing to the oil industry."

I would recommend three strategic steps to revolutionize our oil sector.
1.NNPC should be come a government/public firm with part of it shares allocated for Nigerians. This will provide the company with a new direction and ownership need for the global challenges. By the way we have the money in form of excess funds.

2.NNPC should go on a buying spree with the aid of government funds to buy (outright or major) shares in refineries in Africa, China and United States. This will provide us with immediate source of refined products, opportunities to train our people and hard currency. Best of all this does not need the 18 to 24 months to build a refinery. This will also provide us a stop gag measure until we build more refineries. It is all about add value and we need to start doing that.

3.Start building 4 refineries and retail outlets to take care of the local demand as estimated for 2010. This will help put to rest the fuel challenges that we face as a Nation.

Background and answers
For most of the people who are “privatization supporters”, the believe that private companies only will solve our oil needs at point in time is being unrealistic. After 8 years, 240% increase in price (N11 to N65), 17 licenses granted, zero refineries working and total dependent import. We must say that the Energy policy has been a failure. In most places the people responsible for this failures and continuing to push this failed approach would have been fired at year 2.
Why did they fail? I will give you some reasons.

1.Lack of a Nigerian centric approach. Simply put lack of vision.

2.Corruption and not state owned inefficiencies are responsible for our ills. Most of the companies that are interested in Nigerian assets are government owned companies. Which means that state own or controlled companies are profitable and efficient. PDSVA in Venezuela is an example that currently owns 24 refineries worldwide and sells petrol at N7 per litre.

3.It takes lots of money to play and tonnes to compete in a global oil and gas industry. To illustrate this point the market value of Exxon Mobil is $474.12 billion, while the Chairman, NSP Refineries and Energy Services, Prof. Anya .O. Anya one of the companies granted license was not able to put together a mere $200million financing for a refinery.

.
And for those who want to charge western prices for petrol they should be willing to pay western market salaries. So we can afford to buy the petrol.
The argument of paying for subsides is a non starter, because the multiplier effect on the economy when cost of energy is low is tremendous. Energy is like no other commodity. It accounts for a large part of cost of goods and therefore gives local companies the ability to compete with global companies. This will lead to a reduction in imports of different products while increasing exports for our products. This double “barrel effect” will more than compensate for the so called “opportunity cost”. And we should remember when we establish refineries at home and aboard we will not only eliminate need for hard currency but will gain more foreign currency. For all those who keep on hoping on “opportunity cost” they should stop listening to some foreign interest that are not interested in our well being. If they were these same countries and institutions will first stop stronger nations subsidies before attacking the poorer nations subsides. They keep calling for us to stop subsidizes continue subsidize their own people. Lots of countries provide subsides on several products. USA for example spent $20 billion in farm subsides in 2006 making it difficult for us to sell farm products to them. USA spent $6 billion on oil and gas subsides.
Also we must remember that most of these countries subsides are actually go to affecting the cost of goods like wheat because the cost of wheat is high. Unlike petrol where the cost of extraction and refinery has not change a lot since crude oil was $17.48 per barrel therefore the real subside would have not change if the government had fix and built more refineries in Nigeria in the last 8 years. The so called subsiding is not the same. We are not subsiding cost of product but the high price of crude(and mismanagement of our energy policies zero refineries compared to Venezuela's 24) which today is around $59.25 or 238% from 1999. Last but not the least, the oil that we consume local are also not part of our OPEC quotas so we do not have any “opportunity cost”.
I believe that there is need for the government to step into this issue because this is a matter of national security. A country that cannot provide fuel for its society, with the abundant supply of crude oil, will never improve We need to wake up and take take of ourselves.

We have been bless with natural and human resources and it is time to use them.
God Bless Nigeria!!!!!!!!!
http://nigeriansfor50000mw.com/

[Palamedes]

>>Constructively, the on-going strike over fuel prices is a protest against the Obasanjo government, even out of power.

A more astute union leadership would have allowed the new administration to be seated before starting a new negotiation. The timing reinforces the widely held views that the NLC is run by a mix of mediocre and egomaniacs.

>>… But the Yar'Adua government has failed to make this clear enough by its own tardiness,…

Sir, are you implying that the NLC is not aware that there is a NEW administration in power?

>>… and now by its hard-line stance in its negotiations with the Nigeria Labour Congress, it is claiming ownership of a volatile issue from which it should have distanced itself.

If he had given him to the NLC demands, I am very sure that you or/and your colleagues would be calling him a weak President—one who gives in easily to union blackmails. The new administration needs time to organize itself.

>>Mistake Number One: Instead of toeing this line of action, the Yar'Adua government ignored labour and allowed the two weeks ultimatum and the additional four days that was granted to lapse.

Sir, you show why you are a journalist and not an administrator. The latter is a great deal more difficult and even more so if you throw politics in the mix. I think you should be condemning the union bosses for their tactics and addictions to strikes (so early in the Yar'Adua administration).

[Exxcuzme]

>>Constructively, the on-going strike over fuel prices is a protest against the Obasanjo government, even out of power.

A more astute union leadership would have allowed the new administration to be seated before starting a new negotiation. The timing reinforces the widely held views that the NLC is run by a mix of mediocre and egomaniacs.

>>… But the Yar'Adua government has failed to make this clear enough by its own tardiness,…

Sir, are you implying that the NLC is not aware that there is a NEW administration in power?

>>… and now by its hard-line stance in its negotiations with the Nigeria Labour Congress, it is claiming ownership of a volatile issue from which it should have distanced itself.

If he had given him to the NLC demands, I am very sure that you or/and your colleagues would be calling him a weak President—one who gives in easily to union blackmails. The new administration needs time to organize itself.

>>Mistake Number One: Instead of toeing this line of action, the Yar'Adua government ignored labour and allowed the two weeks ultimatum and the additional four days that was granted to lapse.

Sir, you show why you are a journalist and not an administrator. The latter is a great deal more difficult and even more so if you throw politics in the mix. I think you should be condemning the union bosses for their tactics and addictions to strikes (so early in the Yar'Adua administration).

So you just want labor to take it like that?

[Palamedes]

@Exxcuzme

>>…like that?

Sir, telepathy is not one of my gifts, that is to say, I don’t know which part of my four-paragraph or 150-word comment your question is trying to address.

[Mikky jaga]

By giving in and calling off the strikes, Labour has lost a very good opportunity to confront the evil people behind the incessant fuel price increases. This is not the end to such increases, we have just begun. That Yaradua needs time to settle down does not hold water at all. He has been part of the ruling class for the past eight years. He should have reverted to the old price like he did the VAT increase and negotiate his own increase, if need be.

Gbadamosi has asked the question, what happens if the price of crude rises to $200, since Yaradua has pledged not to increase fuel price in the next 12 months. What he failed to ask is, what happens if fuel price falls below $40. It shows the mindset of the hawks perching on the fuel jugular of the Nation: Fuel price increase and more fuel price increase!

Until there is a revolution that will sweep all these predators away, there is no hope for Nigeria. They just must make their money from the misery of the rest of us. All the money we make, we invariably return to them through the fuel pump. Before long, they will need more money, and they will come calling that there is need to increase fuel price again. What a vicious circle.

The advice by the writer above on how to use fuel suggests a nation in the throe of war, not a peaceful prospering country with large foreign reserves. When the US that imports oil from us sells fuel at the pump price less than we that have the resource, we are doomed.

Nigerians have the capacity to suffer an smile, but one day the slave will ask the right question about his humanity and that will be the day!!

[Palamedes]

We have to move away from irrational and emotive approach (bordered on hysteria) to solving our problems. It is not about posturing or scoring points against the present administration, but rather, doing things in a PROPER way – as civilised countries do.

In advanced countries like Japan and Germany, their trade unions work with their government and industries to advance the interest of the companies and country; and for unions that behaved (in the past) like NLC, they got hammered, as was the case under Margaret Thatcher. To this day, the union in the UK have not recovered from the hammering.

In a developing country like ours, we CANNOT afford the interruptions to production caused by strikes. We have a lot to catch up and the rest of the world is not going to wait for us to do so--perhaps, out of sympathy.

[Highpriest]

Nigerian labour unions are one of the most irresponsible in the world. Can anyone imagine American labour unions shutting down and crippling the US economy over a grouse with the State. As a matter of fact, public workers are PROHIBITED from going on strike in most western countries. To address the issues for this recently called off strike, I believe nigerians will only continue to go round in circles on this fuel price issue. As it is, fuel price is now a political issue in nigeria and as long as NLC/TUC insists that the government cap prices, investors will distance themselves from the downstream oil sector. Little wonder the oil majors refused to invest in existing refineries or build new ones. Same for the 18 refinery licenses recently revoked. While I believe in subsidy, I strongly believe it should be TARGETED to those who really need it and not for everyone
as currently the case in nigeria. In any case, how many nigerians are paying the official price for fuel? The black market is having a field day. It seems to me that the "comrades" leading NLC/TUC prefer a communist style economy where the state leads and dictates everything. This has proven unsustainable. Many nigerians today may not like the prices they are paying for gsm but would NOT want to go back to the infamous days of NITEL inefficiency and monopoly. A price fixing agency like the PPPRA is an aberration in a supposedly deregulated industry while NNPC involvement in the business of fuel distribution will bring attendant government inefficiency in doing business. We prefer to always do the same things and then expect different results.

[tonsoyo]

We have to move away from irrational and emotive approach (bordered on hysteria) to solving our problems. It is not about posturing or scoring points against the present administration, but rather, doing things in a PROPER way – as civilised countries do.

In advanced countries like Japan and Germany, their trade unions work with their government and industries to advance the interest of the companies and country; and for unions that behaved (in the past) like NLC, they got hammered, as was the case under Margaret Thatcher. To this day, the union in the UK have not recovered from the hammering.

In a developing country like ours, we CANNOT afford the interruptions to production caused by strikes. We have a lot to catch up and the rest of the world is not going to wait for us to do so--perhaps, out of sympathy.

Thank you so much Palamedes. As a matter of fact, this article to me has no head nor tail. All Abati is saying here is that Yardua was too slow to act, not that he did not act. Because he was too slow the strike must go on anyway, even if it is the averag Nigerian that they should be protecting that will suffer for it.

When the labor gave the two weeks, it is on record that the government sought a round table discussion with them, but they instead choose to leave fire on their own roof to attend conferences in Geneva at the expense of the same Nigerian workers.

When the negotiation finally took place they got 3 1/2 from the 4 demands, what else do you want from a negotiation. Only for them to settle for the same term that they had rejected after wasting about 96 hours of our lives.

Of course the strike is more than just about the Nigerian workers, but more of ego trip, like some bunch of newly appointed High School Prefects.