Subsidy removal: Government, Labour Unions negotiation deadlocked again

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Labour unions explain why talks failed The Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) have said that the talks between the Nigerian government and the unions in Abuja on Saturday stalled due to differences in the methodology in finding a solution to the crisis. >>>

Subsidy removal: Government, Labour Unions negotiation deadlocked again
Hauwa Noroh Ali, Abuja

The Nigerian government and Labour Unions on Saturday failed to reach a compromise to end the ongoing nationwide strike over the removal of fuel subsidy, potentially sparking an oil production shutdown in a nation vital to US oil supplies.

The Nigeria Labour Congress President, Abdulwaheed Omar, told reporters after the meeting which lasted for more than three-and-a-half hours that both parties could not reach a compromise.

In his words, “if the parties did not reach a compromise, it means status quo remains."

'Shifting ground'

He explained that labour insisted that the government should revert to the 65 Naira per litre pump price of petrol that was obtainable before the January 1 withdrawal of subsidy, but government was not willing to shift grounds.

Omar pointed out that the unions would continue internal deliberations for a way forward.

He avoided answering direct questions about whether oil production would be shut down in Nigeria, Africa’s most populous nation.

The Petroleum and Natural Gas Senior Staff Association of Nigeria had threatened to stop all oil production in Nigeria at midnight. The President of the association, Babatunde Ogun, was not immediately available for comments.

The President of the Trades Union Congress, Peter Esele, said that the government also stuck to its position that a litre of petrol be sold at 137 or 141 Naira per litre.

However, after the negotiation, Senate President David Mark said the meeting was fruitful and that both parties were on the right path to finding an amicable solution that Nigerians would appreciate.

“It is a whole negotiation process and I think the negotiation is going on very well. We have done pretty well; we are consulting; we want to bring this to a logical conclusion at the earliest possible time.”

The speaker of the House of Representatives, Aminu Tambuwal, said that the meeting was not deadlocked as the dialogue would continue.

“What is clear from the briefings is that there has been no deal.”  

Esele, as well as Omar said labour will maintain status quo.

They told reporters that they would meet, perhaps on Sunday with the Organs of Labour to brief the leaders and decide the next line of action.

At their first meeting on January 12, the Nigerian government and labour agreed to shift grounds in their respective positions to end the protest.

Shutdown impact

Nigeria, which produces about 2.4 million barrels of crude a day, is the fifth-largest oil exporter to the US. While the country has a several-week stock of oil ready for export, the threatened shutdown on Sunday could shake oil futures as traders remained concerned about worldwide supply.

The strike began on Monday, January 9, paralyzing activities in the nation of more than 160 million people.

The root cause remains the removal of the subsidy on the Premium Motor Spirit by President Goodluck Jonathan‘s government on January 1, causing prices to spike from $1.70 per gallon (45 cents per liter) to at least $3.50 per gallon (94 cents per liter).

The costs of food and transportation also doubled largely in a nation where most people live on less than $2 a day.

Government’s reallocation programme

The government has stressed that proceeds from the subsidy removal would be reallocated into its proposed Subsidy Reinvestment and Empowerment Programme to lay a foundation for the successful development of a national safety net programme that is better targeted at the poor and most vulnerable on a continuous basis and accelerate economic transformation through investments in critical infrastructure project.

This it says would provide employment for the teaming youth who are unemployed.

Anger over losing one of the few benefits average Nigerians get from being an oil-rich country, as well as disgust over government corruption, have led to demonstrations and violence across the nation.

Red Cross volunteers have treated more than 600 people injured in protests since the strike began, the International Committee of the Red Cross said Friday. At least 10 people have been reported dead.

It is predicted that even if the protests are only partially successful, fears of tightened global supplies could raise oil prices by $5 to $10 per barrel on futures markets next week. Gasoline prices would follow, rising by as much as 10 cents per gallon and forcing U.S. drivers to spend an additional $36 million a day at the pump.

Experts predict the national average in the US could rise as high as $4.25 per gallon ($1.12 a liter) in 2012.

Williams