Labour insists on production cost pricing template for PMS

Labour insists on production cost pricing template for PMS


By Ukpono Ukpong

Organised Labour has said that the current Import Pricing method used by the Federal Government to fix the price of petroleum products is not sustainable.

Therefore, there is the need to work out modalities to adopt Production Cost Pricing method, it said.

Addresing journalists in Abuja, after the bipartite meeting with the Federal Government convened to review the reports of the Technical Committees on Electricity Tariff and Premium Motor Spirit (PMS), the President of Nigeria Labour Congress (NLC), Ayuba Wabba, urged the Buhari administration to ensure that the welfare of the people remains the centre-point of every policy.

He therefore, called on Government to find a way of protecting and insulating Nigerians from the vagaries of market forces. He said that Nigerian National Petroleum Corporation (NNPC), must do everything possible and look at the template to make sure it serves the Nigerians and not the market forces.

Speaking further, Wabba identified inherent interest in importation rather than refining as the reason why the refineries in the country are yet to be fixed.

“The reports were presented and we pointed out areas that we are not comfortable with and we were able to send our views across which will form bases of the decision.

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“We have been using the Import Pricing method, which I think it’s only Nigeria amongst the OPEC countries that has been using that method that intends that hundred per cent of what we consume is imported.

We sale our crude oil and import finished product. “To us, that is not sustainable, it’s exporting our jobs and our first priority is to see how the refineries can be fixed because before 1998, our refineries were working and the model and template that was used in fixing the price was Production Cost Pricing method.

That is the same method used by all the OPEC countries. You don’t have to produce refine products for domestic use and also for local markets.

“This is what will be sustainable at this point in time, that we have posited and we are looking at the timeline for the refineries to start working because you can remember in the past, some of this commitments were made, yet the refineries are not still working because of the inherent interest in importation rather than refining.

The benefits includes jobs because the factories will spring up if we are able to refine the products.” Wabba said Also, Wabba confirmed that both FG and the Organised Labour have agreed that the matter of electricity tariff would be solved through appropriate Gas pricing and mass metering.

“We have had some understand that the issue of continued tariffs increase can be addressed through the issue of appropriate gas pricing.

For now, the gas pricing to the generating companies are actually at $2.80 ad we have proposed that it should be reduced to $1.50. It will affect the downward review of electricity tariff.

“We have also looked at the inefficiency in the system especially the metering, which have become a major challenge but fundamentally, we have said the entire privatization process is due for review.

The condition for the precedent for the privatizations is that after five years, the entire process should be reviewed.” He said.

Earlier, the Minister for Labour and Employment, Dr Chris Ngige, said that the Federal Government and Organised Labour have adopted for implementation, the report of the Technical Committee on Electricity Tariff. Ngige said the Technical Committee on Electricity Tariff would be transmuted into a standing committee for the purpose of implementing the recommendations of the Report.

“We adopted the report of the Electricity Committee, made some adjustments and transformed that technical committee into an implementation committee.

They are now the Standing Committee to implement all the recommendations they gave to us here.” According to Ngige, the recommendations include appropriate gas pricing for Electricity Generating Companies (GENCOs), which would ultimately lead to price reduction of electricity per unit.

He also stated that the implementation committee would ensure effective mass metering of people by monitoring the distribution of meters, as there had been reports that the Electricity Distribution Companies (DISCOs) had been hoarding the meters.

“This would effectively check the practice of irregular billing, like estimated billing, by the DISCOs.” He said.

The Minister further said that the Committee would work to put a stop to forceful migration of consumers from the low-paying bands of D and E to the upper tariff bands of A and B, by the DISCOs.

Ngige added that DISCOs that indulge in such practices would be sanctioned by Nigerian Electricity Regulatory Commission (NERC). He encouraged victims of such migration to petition NERC.

The Minister also disclosed that the matter of a template for fixing the price of petroleum products “is a work in progress.”

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