Govt Lied About Consulting With Labour On New Fuel Price — NLC

General Secretary of the Nigeria Labour Congress, Dr. Peter Ozo-Eson

The General Secretary of the Nigeria Labour Congress, Dr. Peter Ozo-Eson, tells The Punch On Sunday that the Federal Government’s decision to increase the fuel pump price from ₦86.50k to ₦145 per litre is a bad policy which should be reversed

Excerpts below:

The Federal Government has increased the pump price of fuel from ₦86.50 to ₦145 per litre. What is labour’s view on this?

We are taken aback by that action. We think that given the harsh economic terms in which Nigerians are living, which have been further compounded initially by the hike in electricity tariff; that this is not the time to visit another hardship on Nigerians. Looking at even the magnitude and the details of what the Federal Government says it has done, it is even more worrisome. For the first time, we are having a government now directing importers of petroleum products to go into the black market to source for foreign exchange. We think this is a recipe for economic crisis because what will happen is that when the volume of the demand for foreign exchange needed to fund importation of products is moved into the black market, the value of the naira is going to crash. We will not be surprised to see the value of the naira coming under pressure, and going in multiples of hundreds of naira increase to the dollar as a result of that. And if that were to happen, it has implications on the overall economy itself. When the government says it is against devaluation, then, it is contradictory when really it has allowed the massive devaluation that has taken place in the parallel market to now become the window for transaction. Thus, a situation where the domestic price of PMS (Premium Motor Spirit) will now be determined by forces in the black market exchange rate is something that is not good for the economy and we are opposed to it.

Apart from the effects on the economy, do you think it could lead to further increase in the pump price, since it is tied to the exchange rate at the black market?

Yes, it is going to create a circle because what will happen is that once demand forces further depreciation of the value of the naira, then the template that has been used to arrive at the ₦145 now will have to be taken into consideration. And so, it is a vicious circle that will never end. It will create an unstable situation in the economy and that is why we think it is a wrong policy and government needs to revisit it. But more importantly, the economic crisis that the nation is facing already has major negative impact on workers. An average worker on current wage cannot survive because the real wage has been so badly eroded. If we compound it (the problem) through this, we are going to find a situation where there would be conditions that would completely destabilise the workers and their families. Also, these are not things that we think that this government should be doing; the government ought to find more creative ways to deal with the situation that it faces.

Is there a link between the new proposal of ₦56,000 minimum wage and this increase in fuel pump price?

From our side, before arriving at the ₦56,000 that we are demanding, we took into consideration the analysis of some objective conditions on the ground. Actually, we used a three-method approach to compute it: One based on the cost of living, the other based on average minimum wage in other African countries and the third was based on if the real wage of ₦18,000 had been adjusted since 2011. If you wanted to present that wage today, what would it be? These were the three methods and an average of the computation gave us ₦56,000. The reality is that if the increase (in the fuel pump price) that they have announced was allowed to stand, even at the negotiation table, ₦56,000 would become unrealistic because the increase would have thrown up new objective conditions that we have to work into the figures in order to then determine the realistic sum (as new wage).

The Minister of Labour, Sen. Chris Ngige, in his response to the new proposed minimum wage reportedly said the demand was in order and was being studied and the government came up with this increment. Do you think the government wants to use the increment to take back what it is expected to give to workers?

We cannot enter their minds but we do know that the Minister of State for Petroleum  Resources (Mr. Ibe Kachikwu) has been testing the waters through statements that were even contradictory – what we initially referred to in our releases as the flip-flop that were taking place there. Whether or not the minimum wage is what they want to use as a bargaining chip for this is their own choice to make. But for us, that the minimum wage is increased cannot be the logic for this (increase in pump price of petrol) because most of the informal sector — for instance the small enterprises in the informal sector — do not come under the Minimum Wage Act if they do not employ 50 or more people. Apart from very many Nigerians who are not even covered by the minimum wage, this (increase in petrol pump price) would have impact on many Nigerians who have no jobs at all. Thus, using the minimum wage to trade off against this (increase in petrol pump price) is clearly not something that we think is right.

Government officials are saying that they had wide consultations with the organized labour and other stakeholders before taking this decision. To what extent did you have discussions with the government before the increment was announced on Wednesday?

That is even more vexatious because when we heard that statement coming from the Minister of State for Petroleum Resources, we felt very pained that the minister would use deceit to market whatever policy they had brought forward. For the avoidance of doubt, I will just state clearly what happened: On Tuesday, at about 4:30pm, we received a letter from the Vice President’s Office addressed to the President of Congress (NLC), inviting him to a meeting at 12 noon yesterday (Wednesday) for what was termed in that letter as consultative meeting. No subject matter was mentioned. Because the NLC President was not officially available –  he is on official assignment outside the country –  we discussed the invitation and it was agreed that I would go to represent the congress. And I was there to represent the congress. It was at that table yesterday (Wednesday) that we saw the agenda, where it was stated that the minister would make a presentation. And he made a presentation. Having made it, the Vice President (Prof. Yemi Osinbajo) then asked people to discuss or comment or ask questions. In that meeting, we discovered there were a number of senators led by the Deputy Senate President (Sen. Ike Ekweremadu); there were a number of members of the House, led by the Speaker of the House (Mr. Yakubu Dogara); there were a number of state governors led by the Chairman of the Nigerian Governors’ Forum. And there were three of us representing Labour. I represented the NLC; the President of the Trade Union Congress represented the TUC, while the President of NUPENG represented NUPENG.

There were comments mainly from the members of the House and the Senate. Some asked questions and the others advised as to the sensitivity of the matter and all that. Because we were confronting the matter for the first time, we were quiet until the Vice President now chose to call us individually by name. He called on me and asked what the position of the NLC was. I responded that as far as we were concerned, we had heard the presentation, we were a democratic organization, we would take the substance of the presentation to our organ’s meeting and when our organ’s meeting had deliberated on it, we would get back to them. The TUC President said virtually the same. He (Osinbajo) asked the NUPENG President, who also said virtually the same thing. Thus, we ended that meeting, at least from our side, with the position that we needed to take the presentation and discuss it within our organs before we get back to them.

I was completely taken aback when I was just returning to the office when a journalist called me and said government was increasing the price of PMS (petrol) to ₦145 per litre. I also heard later in the news that the decision was taken in the meeting that we attended. That is a lie! I make bold to say it today that that is a lie. And government shouldn’t use lies to market whatever policies they have taken. We were no party to that decision. We need to be very clear.

How strong is labour’s relationship with the civil society movement as there is the impression that after the “Occupy Nigeria” protests of 2012, the relation became strained?

Between the 2012 episode and now, we have had a number of consultative meetings and joint events with the civil society.

With this new development, will labour still stick to its demand of ₦56,000 minimum wage?

We have rejected this increase and we have called government to reverse it. But if this price stands, then, clearly the demand for ₦56,000 will become nugatory. Now, there would have to be a revisitation of what the realities are. But our position is that we will just be protecting only workers who are covered by the minimum wage, and that what needs to be done is to remove the policy itself, which is a bad policy, so that the people generally can be protected.

Why did you say in your statement that the decision taken by the minister was illegal?

Yes, it is illegal. There is a law; the Petroleum Products Pricing Regulatory Agency Act stipulates the legal framework for the management of prices of petroleum products. That power is vested in the PPPRA board and the law carefully puts in place the membership of that board. Stakeholders’ representation is what makes up that board. We are by law a member of that board; National Union of Road Transport Workers by law is a member of that board; NUPENG by law is a member of that board; PENGASSAN is a member of that board, and various others, including the Independent Petroleum Marketers Association of Nigeria, the major marketers and others. It is actually the board that should review the template. When we heard that the PPPRA had reviewed the template and had come out with a recommended price; that was illegal because the PPPRA, with the way it is functioning now, is an extension of the Office of the Minister of State for Petroleum Resources. The minister has become a sole administrator in the sector. There is no board for the Nigerian National Petroleum Corporation, there is no board for the PPPRA, hence, for anyone to perform their function is therefore illegal. Even before now, we have written formally to the government — to Mr. President — demanding that the legal line be followed and that the board be constituted. So, it is illegal.

There are 26 governors that have not been able to pay ₦18,000. In the event that the subsidy on petrol is reduced, how do you expect the state governors to be able to pay the ₦56,000 wage?

You said that many governors kept saying they were unable to pay. We take the position that that is not correct. They are not paying because they have not managed their affairs properly within their resources, and within the ambience of good governance that can generate revenue. These governors are failing in their governance responsibility and that is why they are not paying; it is not that they are unable to pay. State governments have the right on land. Have you heard of any state government that has made investment in agriculture in order to generate revenue? Governments need to be creative to the extent that there are governments that are paying the same way other governors — if they manage their affairs properly and set their priorities right, would be paying. With ₦18,000, if you take care of a family of four, you know what that translates to. It is a ‘poverty amount’ we are talking about. We can’t be saying they are unable and that, therefore, should preclude us from asking for a living minimum wage. The practice around the world is that the minimum wage should be set at a level that represents a living wage.  And a living wage can easily be computed using international guidelines by using the two dollars a day instrument. If you were to use that, you know what we will be talking about. The state governments need to sit up. After all at individual level, if individuals don’t manage their financial wherewithal properly, bankruptcy is declared. If there are states that are therefore unable to manage their affairs properly, let them declare themselves insolvent and seek merger or let the governors resign and allow those who are going to be able to manage the states and effectively govern to take over those responsibilities.

Prior to this increase in the fuel pump price, there was a 45 per cent increase in the electricity tariff and the NLC threatened to go on a one-day-warning strike. What happened to that move?

The Central Working Committee (of the NLC) took that decision and we were then to call a NEC meeting to ratify it. That NEC meeting was called formally for next Monday, then, suddenly this happened. And because this happened suddenly, we had to advance an emergency session on Friday. Those are the two critical issues that would be resolved.

What do you want President Muhammadu Buhari to do on these two issues?

We believe that Mr. President needs to realize that not just workers but all Nigerians have a lot of expectations from him. He should also realize that we cannot yield to the pressure from the International Monetary Fund, the World Bank and others because it is not a secret that there has been consistent pressure from them. Mr. President has been taking the position that he would not succumb and now we see him succumbing. It raises issues as to whether he is still in control; it raises issues as to whether there are people within his government who are pushing policies that Mr. President himself has said were not good. These are the issues that need to be addressed. We would want Mr. President to trust in his own already considered position against this type of policies.

Labour holds the view that the minimum wage is subject to review every five years and that the agreement was captured in the law but the Chairman of the National Salaries Incomes and Wages Commission, Dr. Richard Egbule, said that there was no such agreement. What is your take?

During the Justice Alpha Belgore’s tripartite committee that produced the 2011 minimum wage, part of the discussion that took place was the periodicity of the review and it was agreed that it would be reviewed every five years. In making the recommendation from the tripartite committee to Mr. President, this was included in that recommendation. As a matter of fact, there was a draft bill that was superintendent over by Justice Belgore that, today, is to be the basis for the revision of the law. Unfortunately, what happened was that the government then went with an amendment to the Minimum Wage Act which just sought to amend just about to two or three parts where the amount was amended and some of the amounts for penalties for failure were amended and other things were left out. It is already an agreement that we reached collectively on the tripartite table.

Was the agreement signed by both parties?

Yes, we signed the outcome. It is in that context that we can lean on that to say that five years is the period of review.

What should Nigerians do on this issue of fuel pump price?

We’ve heard people calling and saying, ‘Please, you should not let us down on this one.’ We also want to tell Nigerians that they must prepare. People get what they ask for. Therefore, if there is the need for action, it is not for Nigerians to sit back and say labour should do it. It is the degree to which Nigerians respond that the success of it will be. We call on Nigerians to rally round and build movements — whether it is students’ movement, groups, informal sector groups or civil society — so that we can all work together to struggle for the soul of this country.