Pegging Pump Price Is Beyond The Power Of NNPC– NLC President

EKO HOT BLOG reports that the President of the Nigerian Labour Congress (NLC), Joe Ajaero, has asserted that the Nigerian National Petroleum Corporation (NNPC) does not possess the legal authority to determine the prices of petroleum products.

Ajaero’s statement comes in response to the federal government’s recent announcement that there was no provision for fuel subsidy in the 2023 budget beyond May 29, despite records indicating the existence of subsidy provisions until the end of June.

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According to Ajaero, there is a reported backlog of approximately N2.3 trillion in subsidy payments owed by the NNPC. He argues that in a competitive market like Nigeria, the constitutional power to determine prices does not lie with the NNPC.

Speaking in an interview with Arise TV on Monday, June 5, Ajaero stated,

“If the government says there is no appropriation for subsidy, then we can discuss that. However, the absence of subsidy in the budget does not grant the NNPC, a private limited company, the authority to determine prices. They do not possess such powers, and there is no evidence that their board, as a limited liability company, ever met to make such a resolution. The labor movement does not accept such details.”

Ajaero further recounted a meeting held with President Muhammadu Buhari and his team on Tuesday night, during which the NNPC announced its intention to release figures and prices without prior discussion.

Ajaero expressed opposition to this approach and warned of a fightback. Despite the boycott threats, labor representatives attended the meeting and requested a return to the status quo to enable free and open discussions. However, the NNPC has not complied with this request, leading to uncertainty regarding the purpose of further meetings.

Challenging the government, Ajaero called for transparency regarding the subsidy payments made and those outstanding. He also questioned why previously agreed-upon alternatives had not been implemented.

Responding to arguments put forward by the federal government, which highlighted the potential impact of the newly constructed Dangote refinery and the influence of market forces, Ajaero expressed concerns about potential monopolization in the oil sector.

Ajaero emphasized,

“How can there be market forces if Dangote is the only player in the market? Are we not repeating a private sector monopoly? Why are the Port Harcourt, Warri, and Kaduna refineries not functioning? Without additional players in the sector, we cannot talk about market forces or competition. A single participant in the market does not align with the concept of market forces. Unless we have other players in the sector, we cannot make sense of the argument.”

Ajaero cautioned that if only Dangote’s refinery remains operational between now and December, the price of a liter of oil could exceed N1,000. These concerns raise doubts about the viability of relying solely on market forces in the absence of competition in the sector.

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As the debate over petroleum product pricing continues, Ajaero’s remarks highlight the labor movement’s skepticism towards the NNPC’s authority and the need for a comprehensive approach to address the challenges in the oil sector.

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