Fear over fuel scarcity as CSOs tackle Labour Unions

February 28, 2021

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A coalition of Civil Society Organisations (CSOs), yesterday, in Abuja expressed concern over possible return of scarcity of Premium Motor Spirit (PMS), otherwise called petrol, as intrigues grow over the deregulation of the petroleum industry.


The CSOs, which vehemently opposed the position of Labour unions, especially the Nigerian Labour Union and the Trade Union, noted that any attempt to reverse the deregulation of the downstream sector would send Nigeria’s economy into coma and leave decades of economic woes.

With queues already returning to some parts of the Federal Capital Territory, as fuel stations are already closing down, while black marketers are surfacing in some parts, the CSOs, led by the convener, Timothy Ademola, stressed that the market stabilisation witnessed in the past one year of deregulation, remained an indication that full deregulation is the way to go, if Nigerians would enjoy the benefits of their hydrocarbon wealth. Considering the difficulty in raising enough fund to finance the 2021 budget, Ademola noted that the country must avoid a situation where the national oil company would be boxed, as the implication would mean fuel scarcity and the return of fuel queues.

He warned Labour unions not to constitute downright opposition to deregulation, but partner government on how to achieve patriotic, people-centered downstream sector, especially ensuring that national refineries are revived.

He said: “It will do our nation much good, if our respected Labour leaders spearheading resistance to deregulation would recognise that it has largely stabilised petroleum products supply over this past year. 

“Once the foreign exchange issue that has made it difficult for major and independent marketers to engage in importation of petroleum products is resolved, the other gains of deregulation will kick in and Nigerians will be the better for it.” 
Following the economic challenges that resulted from the COVID-19 pandemic, the government had opted for deregulation of the downstream, removing subsidy from petrol, a development which increased the price, as citizens now have to accept international market forces, especially crude oil price and exchange rate.

With increase in crude oil price, as economies reopen, Labour had returned to its earlier position after dragging government to a N5 reduction in pump price.

President of NLC, Ayuba Waba had told The Guardian that decisions that affect the larger population would not be tolerated; stressing that Nigeria is being turned into a commodity country, where products are only dumped.

But Ademola noted that the deregulation of petroleum downstream would bring about liberalisation of the sector, which would make it possible for all petroleum products marketers to source their products from anywhere and sell at any price dictated by prevailing market forces. 

“The competition arising from that would have helped to force pump prices down to citizens’ benefit. But the scarcity of foreign exchange has made it difficult for marketers to import products, thereby making NNPC the sole importer in keeping with its statutory role as marketer of last resort. “With Labour’s agitation for the roll back of deregulation, NNPC will inadvertently have to absorb the cost of the price differences between landing cost and pump price.


This would most likely put NNPC in a very bad spot financially and eventually lead to a situation where it would be difficult to further import products. The obvious implication of that is fuel scarcity and the return of fuel queues,” he said.  

Energy expert, Henry Adigun noted that refineries might run at a loss, if they have to cope under gloomy sector, especially the exchange rate. 

“Nobody would produce a product in a market where they are not able to control the price at the point they can make a profit. One of the mistakes we make about deregulation is the absence of government. There will always be consumer protection in deregulation,” he said.

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