TUC urges govt to use excess crude revenue to subsidise local refineries
The Trade Union Congress of Nigeria (TUC) has urged the Federal Government to use excess revenue from crude oil sales above the budget benchmark to subsidise crude supplied to domestic
The Trade Union Congress of Nigeria (TUC) has urged the Federal Government to use excess revenue from crude oil sales above the budget benchmark to subsidise crude supplied to domestic refineries.
The union warned that the pump price of Premium Motor Spirit (PMS) could climb to about N2, 000 per litre as a result of the ongoing US-Israel- Iran war which has affected the price of crude globally. The union also urged the government to accelerate investment in Compressed Natural Gas (CNG) infrastructure to cushion the economic hardship on Nigerians.
Addressing newsmen in Abuja, yesterday, the President of TUC, Festus Osifo, an engineer, expressed optimism that the twin measures would provide both immediate and long-term relief to citizens struggling with the rising cost of transportation and goods.
According to him, the surge in petrol prices was already inflicting severe pain on workers and households across the country.
Osifo added that the impact of the fuel price increase was already spreading across the economy.
He said: “Today, comrades, we are seeing that the cost of petrol is edging towards N2,000 per litre, depending on the part of the country that you are in. Nigerian workers are already passing through excruciating pain as we speak.
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“The same way it is affecting transportation, it is also affecting manufacturing. The cost of diesel has also gone northward, meaning that the cost of production has increased.”
When the cost of production goes up, the final price of goods on the shelves will also skyrocket.”
Osifo noted that the 2024 budget benchmarked crude oil at $64.85 per barrel, meaning any price above that level generates excess funds shared by the three tiers of government, as he argued that part of the excess should be used to support local refining.
He said: “If crude is selling at around $100 per barrel and the benchmark is $64.85, the difference should be partly used to subsidise crude supplied to local refineries. When the government supports production in this way, the price of PMS, diesel and jet fuel will drop almost immediately.”
Osifo, who doubles as President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), added that the approach would avoid the abuses associated with the former petrol subsidy regime.
He said: “When you subsidise crude supply directly to refineries, it cannot be abused because you are subsidising production. Within one or two weeks, Nigerians will see a reduction in the price of petroleum products.”
While advocating immediate intervention on petrol pricing, the TUC president said the large-scale adoption of CNG remains the most sustainable solution to Nigeria’s transportation fuel crisis.
He, however, warned that the success of the programme depended on the rapid deployment of CNG refuelling infrastructure across the country.
He explained that the lack of CNG refuelling stations across major highways could discourage adoption.
Osifo said: “The government has said they want to bring in more CNG buses, and we acknowledge that it is a good initiative. But the biggest challenge today is the infrastructure.
“If you are travelling from Kabba to Ilorin or from Ogbomosho to Ibadan and your vehicle runs out of CNG, where are you going to refill? It becomes like driving an electric vehicle without charging stations.”
Osifo stressed that expanding the CNG network would help Nigeria gradually reduce its dependence on petrol and shield citizens from volatile global oil prices.
“The concept of CNG was actually proposed by organised labour, but the implementation has been very slow. The government must speed up the deployment of refuelling stations so that Nigerians can conveniently use CNG vehicles across the country,” he said.
Osifo also blamed the high cost of petrol partly on the continued depreciation of the naira, noting that the exchange rate plays a major role in determining domestic fuel prices.
He added: “If our naira today was below N1,000 to a dollar, Nigerians would be buying petrol for less than N1,000 per litre. The more the naira devalues, the more our purchasing power erodes.”
He maintained that the naira should ideally trade between N800 and N900 per dollar to ease inflationary pressure in the economy.
The TUC president also raised concerns over Nigeria’s worsening security situation, describing the persistent killings in parts of the country as unacceptable.
“It is really appalling to see Nigerians being killed like chickens. This is one death too many, and the government must do everything possible to restore security, because development cannot happen in an insecure country,” Osifo said.
He, however, commended the efforts of the armed forces and other security agencies and urged the government to provide them with modern equipment and technology.
On workers’ welfare, Osifo said labour unions were engaging employers and the government to cushion the impact of the economic crisis on workers.
He noted that although the next national minimum wage review is expected in 2027, discussions were ongoing to address the current hardship.
“Anything that can be done to cushion the hardship that Nigerians and workers are facing today will be appreciated,” he said.
Osifo added that TUC would formally transmit its recommendations on fuel pricing reforms and CNG expansion to the Presidency and the Secretary to the Government of the Federation.
