The Nigerian Labour Congress (NLC) has announced its intention to rally its members, without notice to the government, for an indefinite nationwide strike in the event of a rise in the present petrol price.

The president of the union, Joe Ajaero, said this on Monday during the African Trade Union alliance meeting in Abuja, on the heels of the disclosure by petroleum marketers that fuel pump prices will rise to N680 and N720 per liter in the coming weeks.

“As we are here they are contemplating increasing the pump price of petroleum products and the federal ministry of labour and employment, for some time now, will only go to the federal ministry of justice to come up with injunctions to hold the hands of labour not to respond,” he said.

“Let me say this, Nigerian workers will not give any notice if we wake up from our sleep to hear that they have tempered with prices of petroleum products.

“They have started floating ideas of a likely increase in the pump price of petroleum products.”

Independent Petroleum Marketers Association of Nigeria (IPMAN) said on Sunday that the lack of dollar liquidity in the Investor and Exporter window, and the depreciation of the naira in the parallel market, if not urgently contained, will push the pump price up.

The increase will see Nigerians paying an additional N103, as currently, petrol is being sold at N577 per liter in Lagos and N617 and above per liter in many other parts of the country.

Background of the strike threat

Since the fuel subsidy was removed in June, organized labor has been at loggerheads with the government over the provision of palliatives to mitigate the impact.

Among their demands, the Trade Union Congress (TUC) and the NLC are asking the federal government to increase the minimum wage to at least N200,000 per month from the current N30,000 per month. They are also asking the federal government to revive the CNG project for labor centers.

Other demands include rehabilitation of the nation’s refineries, fixing road and rail networks, and reviewing multiple taxes on businesses.

With the government dragging its feet in meeting these demands, organized labor on July 26, issued a seven-day ultimatum to the federal government to reverse all “anti-poor” and “insensitive” policies.

The NLC said no going back on the strike unless the federal government meets the following demands: “the immediate reversal of all anti-poor policies of the federal government including the recent hike in PMS price, increase in public school fees, the release of the eight months withheld Salary of university lecturers and workers”. It also added “the immediate inauguration of the Presidential Steering Committee.”

But in response to the union’s demands, the federal government invoked a restraining order of the national industrial court, stopping organized labor from embarking on any industrial action concerning the removal of petrol subsidy.

However, defying the government and the court, the unions embarked on a nationwide protest on August 2, prompting the federal government to initiate contempt proceedings against them for disobeying the court order.

Though the protest was suspended on August 3 following a series of negotiations between the leaders of organized labor and the federal government, the NLC has not closed the chapter on a nationwide strike. The union said the conduct of the federal government led by Bola Tinubu “suggests it does not intend to commit itself to the MoU it signed with NLC and TUC.”

Former Nigerian Minister and former Nigerian deputy permanent representative to the United Nations, Usman Sarki, has identified the need for media organizations and foreign relation department to prioritize strategic communication and fact-finding analysis in the reportage of the Coup in Niger and the consequent ongoing loggerhead between the Nigerien military junta and the Economic Community of West African States (ECOWAS).

Mr. Sarki made this call during an interview on the Television continental (TVC)’s night show, ‘”Politics Tonight” on Friday evening. According to the former UN diplomat, promoting ill-baked reporting of the management of the crisis has severe implications not only for Nigeria and Niger but also for many other African countries.

Therefore, Mr Sarki believed it is high time traditional media organizations and relevant government agencies weighed in more on strategic information sourcing and communication to avoid a situation where the people have to continue to depend and act based on rumours and conspiracy theories being spread on the social media.

‘’In crisis situation, the first casualty is the truth. Nigerians should be very conscious about what they consume on the social media.

‘’Information is very critical; it is the bedrock of diplomacy and the bedrock of interstate relationship. So, whatever information is being released for the consumption of the public or the attention of the regime has to be precise, accurate and to the point,’’ Mr. Sarki said.

Mr Sarki remarked that ‘’the problem that has arisen out of this saga is that the president of Nigeria, Bola Ahmed Tinubu, wants war and there is no basis for us to think that war was the first option.’’

Mr Sarki stated that it is erroneous to think that the ongoing crisis is a war between Nigeria and Niger or between ECOWAS and Niger. Rather, according to Sarki, the crisis is a battle of legality vs illegality — legality as represented by President Bazoum and illegality represented by the usurpation of a democratically elected government by the Military Junta.

He added that the Tinubu-led ECOWAS is very clear about its ‘’sentiment of zero-tolerance to coup and unconstitutional changes in Government’’.

‘’ECOWAS is using the instrumentality of its statutes and protocols in order to assert the prerogative of the regional organization to establish order and bring back constitutional rule in Niger as it would in any other member state that has taken the path of military rule at this precise moment’’ Sarki said.

On how ECOWAS, the Nigerian government and the media can harness information and ensure strategic communication in the management of the crisis in Niger, Mr Sarki made the following recommendations:

1. ECOWAS must establish a communication system whereby its messages could go to every member state of the community through the traditional and non-traditional media.
2. The Nigerian Government should engage in complementary approaches by embarking upon constructive false ride, truthful and timely release of information not necessarily through the president’s spokesperson but through the Ministry of foreign affairs.
3. The Ministry of foreign affairs should be allowed the exercise of its prerogative in the field of foreign policies in informing Nigerians about the objectives of the actions and policies of the Nigerian Government.
4. Media organisations and Government agencies responsible for public information should also contribute by way of asking questions and conveying answers to the Nigerian public in order not to keep people in anxiety or in the dark about the purposes of the measures, the intentions behind the measures and the ultimate objective that is being sold by the measures.

On July 26, 2023, General Abdourahamane Tchiani led a military coup in Niger that overthrew the democratically elected President of the country, Mohammed Bazoum. Following that, Tchiani declared himself head of the National council for the safeguard homeland and placed president Bazoum and some members of his families under house arrest.

Despite several appeals, threats and sanctions to the military Junta by ECOWAS, the mission to establish constitutional order and restore democratic government in Niger has remained in a state of impasse.

However, on Monday, August 14, 2023, the leader of the Military junta, General Tchiani, said he’s open to diplomatic conversations with ECOWAS. This was after a meeting with the intervention team of Nigerian Islamic scholars in Niamey.

Nigerians are in uproar following the report that the cost of Premium Motor Spirit (PMS) also known as petrol, driven by the depreciation of the naira in the forex market, will hit N680 per liter and N720 per liter in the coming weeks.

The Punch reports on Monday, quoting oil marketers, that the recent rise of the dollar to N950/$1 in parallel will inevitably push the pump price of petroleum products as well as other goods and services further up.

After hitting N955/$1 last week, the naira closed at N9450/$1 on Monday, a situation that indicates a scarcity of dollars that oil marketers said has significantly undermined their ability to import PMS.

“Once there is a slack in the naira against the dollar, there is going to be an effect. The demand and supply of forex is a key factor. We should also understand that it is not only petroleum products that use forex,” the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, was quoted by The Punch as saying.

“Other manufacturers who import one thing or the other are also searching for dollars. So, the surge for dollars has continued to increase. So now that the dollar is hitting N910 to N940, and approaching N1,000, you should expect to buy PMS at the rate of N750/litre.

“It is simple mathematics, once the dollar is going up, have it in mind that the prices of petroleum products would definitely increase because the products are dollar-driven,” he added.

The marketers said they require about $25 million to $30 million to import petrol into Nigeria, but can’t access the fund through the Investor and Exporter window where the naira trades higher at N740/$. This is because there is no fund in the I&E window.

“To buy products, it costs you between $25m to $30m. You can’t find it in the I&E window. So it doesn’t work and that is why people are not importing,” the Executive Secretary, Major Oil Marketers Association of Nigeria, Clement Isong said.

The decision of the Central Bank of Nigeria to float the FX market has been observed putting a lot of pressure on the parallel market.

The inability to access dollar through the I&E window has led dealers who were initially eager to import PMS to suspend their plans, the marketers said.

“Nigerians should brace for a price regime of between N680 to N720 if the exchange rate stays around N910 to N950/$1, but the price is going to hit N750 once the dollar rises to N1,000.

“This is because marketers still source dollars from the parallel market, and not only marketers but virtually all importers in Nigeria. There is no subsidy any more on petroleum products, so you expect the cost to fluctuate with the dollars,” Ukadike added.

The removal of fuel subsidy means that the price of petrol in Nigeria will now be determined by the international cost as well as the naira to dollar exchange rate. Since the floating of the FX market, the disparity between the I&E window and the parallel market exchange rates has grown wide, amounting to about N205.

This is attributed to the lack of dollar liquidity in the I&E window. The oil market leaders said that oil marketers still rely on the parallel market to source dollars.

Another challenge noted by the IPMAN PRO is that the Nigerian National Petroleum Company Limited (NNPCL) remains the sole importer of petrol in the country. He said though recently, Emadeb, an oil-marketing company, which was issued a license, imported petrol – it is grappling to recoup its investment as the dollar has risen further since then.

“NNPC is still the major importer for now. One other company, Emadeb, imported products recently, but because this product is being sold in naira, getting back their funds is another issue since the naira keeps depreciating, while PMS imports is in dollars,” Ukadike said.

“This is why it is often difficult to go back and buy again as an independent importer. That is the problem we are facing.”

While oil marketers agree that having multiple importers will reduce the pump price of petrol per liter – as it will drive competition, the fear of losing their investment to the volatility of the FX market has dampened the willingness of potential importers.

The cry for a solution

In addition to calls for intervention in the FX market, stakeholders have urged the federal government to quickly resolve the crisis in the oil sector by curtailing oil theft in the Niger Delta.

“Nigeria has to sort out the security issues in the Niger Delta so that we can increase our daily crude oil output. If we increase it to 1.8 or two million barrels per day, then there’ll be dollar in the market. So we need to stop oil theft,” Isong said.

Nigeria earns 90% of its foreign exchange from oil but has been experiencing revenue shortfalls due to low oil output attributed to theft. The nation’s daily oil production in July 2023 fell by 13.6% to average 1.08 million barrels per day compared to 1.25mbpd recorded in June, according to the latest production data from the Nigerian Upstream Petroleum Regulatory Commission, (NUPRC.)

With the naira on a swift race to N1,000/$1, analysts believe that it’s only a matter of time before the cost of petrol and goods and services hit the rooftop.

This backdrop, which is increasingly crippling economic activities in Africa’s largest economy, means that the government will need to act fast if the imminent increase in petrol pump prices will be averted.