Strike, Protests Looms As Federal Government Plans To Return Fuel Subsidy

Nigerians might be subjected to another long ‘stay-at-home’ order by the Nigeria Labour Congress (NLC) as President Goodluck Jonathan has proposed to cut fuel subsidies in half in a bid to reduce spending after a retreat in global crude prices. Business Day reports.

According to the  Senate  President, David Mark,  the government   plans to reduce fuel subsidies next year to N458.6 billion   from N971.1 billion , citing a revised 2015 Medium Term Expenditure Framework and Fiscal Strategy Paper submitted by  President Jonathan.

The government’s last attempt to scrap the subsidy in January 2012 provoked a week of strikes and nationwide protests which forced the government to partially reinstate it. Labour unions  opposed the subsidy’s removal and said the government should fix its poorly maintained refineries and tackle corruption before raising cost for Nigerians.

Nigeria has four refineries that have capacity to refine 445,000 barrels of crude oil per day but they have been moribund for several years.

The  government inability to rehabilitate or privatise them has put the burden of importing petroleum products, especially Premium Motor Spirit (PMS) or petrol, on the government at very high expense. The total production capacities of the refineries  currently is not more than  seven million litres of pms.
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The country  consumes an average of 40 million litres of PMS daily, most of which are supplied by the Nigerian National Petroleum Corporation through its subsidiary, the Petroleum Products Marketing  Company (PPMC).

The global collapse in oil prices is biting into Nigeria’s income, 70 percent of which comes from crude exports. Finance Minister Ngozi Okonjo-Iweala plans to cut expenditure by 6 percent next year and lower the budgeted benchmark oil price to $73 per barrel, from $77.5 this year.

Kerosene subsidies will also be cut to N156 billion, from N250 billion, according to the proposal.

Recently, some experts predicted that the Federal Government will spend up to N600bn on fuel subsidy this year and the Government went further to instruct Private Jets Owners To Pay More Taxes As Oil Prices Crash

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