Special FX Rate For NNPCL Will Crash Petrol Prices – TUC

Posted by African Examiner Featured, Latest Headlines, News Across Nigeria Monday, September 9th, 2024

(AFRICAN EXAMINER) – The Trade Union Congress (TUC) has called on the Central Bank of Nigeria (CBN) and the Nigeria Customs Service (NCS) to give a special foreign exchange rate to the Nigerian National Petroleum Company Limited (NNPCL).

The TUC said with the NNPCL granted a special forex rate of about ₦1000/$ instead of the ₦1,600/$ official rate, the cost of petrol importation by the state-run company will crash and fuel prices will drop to around ₦600 from its current pump price of over ₦900, depending on the part of the country.

Osifo, also the President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said the real problem is not subsidy removal in May 2023 by President Bola Tinubu but the devaluation of the naira by the current administration.

“The ultimate elephant in the room is devaluation,” Osifo stated, explaining that petrol would be selling at around ₦350 if the naira was not devaluated simultaneously with the removal of petrol subsidy last year, declining from around ₦700/$1 to over ₦1,600/$1.

The TUC boss said subsidy is still being shouldered on petrol by the NNPCL despite the fresh adjustment of petrol pump price from around ₦600 to over ₦900.

Osifo said, “If you give a special rate to NNPC, you don’t need to pay for subsidy anymore. The same special rate that was given to Dangote (Refinery) to sell, a special rate was given.

“Before now, we have had our Customs giving special rates. So, that special rate should be given in that sector.

“With the sale of crude to Dangote in naira, and you decide that that crude you are selling to Dangote in naira, the exchange rate will be ₦1,000 to a dollar. If you do that, all marketers can go to Dangote and sell at a reduced rate compared to what is practicable today.

“It is about the exchange rate and that is what we have propounded over time.”

The TUC boss warned that if the government does not take immediate decision, the effect of the fresh hike in petrol prices will reverberate across the length and breadth of Nigeria, with attendant job losses and companies folding up, as foretold by industry groups like the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the Lagos Chamber of Commerce and Industry (LCCI), and Nigerian Employers Consultative Association (NECA).

He said the organs of the TUC would meet to decide the way forward should the government fail to revert petrol prices to around ₦600.