PRESS STATEMENT: Congress has received with disappointment reports to the effect that the Federal Government has decided to fully deregulate the downstream sector of the petroleum industry. The said reports have indicated that government would seize to subsidize the prices of petroleum products, which would now be left to the interplay of market forces. Moreover, government is to privatise the existing refineries as part of the deregulation programme.
As we have said repeatedly over the years, this is a wrong policy. Congress remains committed to its long held positions on this matter and will do everything in its power to save the nation the catastrophic consequences of this ill-advised policy. At a time when most nations of the world are pulling back from the realms of market fundamentalism and are adopting measures to protect their economies and citizens, it is sad that our government is allowing itself to be goaded and stampeded into adopting ideologically driven policies that will in the long-run wreck the welfare of Nigerians and the economy’s capacity to compete.
As we have argued many times before, given the high rate of dependence on private energy generation by manufacturers and other producers, necessitated by the unstable and unpredictable power supply and the near total dependence on road transportation for the movement of goods and persons, it is obvious that the cost of domestic production will escalate substantially as petroleum products’ prices rise. Apart from us, the Manufacturers Association has made this point over and over in the past. This will further lead to a loss of competitiveness of domestic goods and services in the domestic market. The obvious result is that the objective of growing the economy will become unrealizable.
The implication of collapsing domestic production and the shutdown of domestic firms and factories for the goals of reducing unemployment and poverty is, of course, obvious. Shot downs resulting in lay-offs will continue to swell the ranks of the unemployed.
Our shock and disappointment are the more amplified by the fact that when we met with Mr. President just three days before, the issues of deregulation and privatization were key among the issues we tabled before him. Mr. President directed that a committee of government and labour should be set up to deliberate on the issues raised. How could the government, in good faith, then proceed three days later to pronounce with what appears like finality on the deregulation of petroleum prices and the privatisation of the refineries?
The reported reasons for this decision included the allegation that the petroleum subsidy scheme has been characterised by inefficiency and corruption as well as the allegation that huge amounts allocated to reviving the refineries have not produced desired results. Clearly, part of the responsibility of government is to ensure that its policies and programmes are efficiently run and that corruption is checked. Why should the government seek to sell off the refineries on this count rather than take concrete steps to ensure that they are efficiently run? How many people have been brought to book for mismanaging the funds for the unending turn-around maintenance episodes? How many officials and companies have been arraigned for abusing the petroleum support fund? Should we abrogate or privatise government, given all the revelations of corruption that have trailed its activities?
Congress calls for an urgent stakeholders’ forum to deliberate on the correct ways to deal with the problems in the downstream sector. The starting point is to examine and implement the outcomes of earlier fora, such as the report of the Senator Mantu-led committee.
While Congress is willing and desirous to maintain a peaceful industrial relations climate, particularly at this period of economic crisis, our commitment to resist the wholesale deregulation of petroleum products’ prices and privatisation of our refineries through all means at our disposal remains unshakable.
In the meantime, we shall liaise with our Civil Society allies and other well meaning Nigerians to articulate an appropriate response to this latest situation. Congress will after consultations call an emergency meeting of its National Executive Council to give further directives on how to confront the situation the nation is being thrown into by this ill-advice policy.