Falling oil prices: Labour warns FG against austerity measures

02 January 2015, Lagos – The Federal Government to take sustainable, viable and proactive steps to addressing the consequences of the falling crude oil prices instead of punitive measures against ordinary Nigerians especially workers.

Speaking through Nigeria Labour Congress, NLC, labour said the first practical step was the diversification of the nation’s economy as against the over dependence on petroleum with its vagaries in the international market.

brent.oilNLC in a new year message by its President, Mr. Abdulwaheed Omar, lamented that “in spite of government’s sworn commitment and the presence of a multi-agency task force in the Niger Delta, crude oil theft assumed a phenomenon in the year, accounting for as much as 30 per cent of national output.

This has created loss of revenues and divestments. Closely linked to this horrendous crime is the degradation of the environment by illegal refineries, oil spills, cover-ups and related incidents.

It would appear that government does not have a structured response to the present volatility in the crude oil market sparked by commercial shale oil mining and deepened by crashing prices across the globe. Practically all the measures mooted or taken so far by government smack of shock and panic and clearly expose our vulnerability.

“Clearly, this would have been avoidable if our suggestions had been taken on board by government. For instance we recall advising government time without number to boost the capacity of domestic refining instead of depending on imports whose landing cost is dependent on prevailing exchange rate and other motivations not far from usury”

According to NLC, “while we appreciate the difficulties brought on by the collapse in oil prices, we caution against the imposition of unselective austerity measures. Already, workers continue to bear the brunt of the savage devaluation of the Naira with possibility of collateral consequences.

We also strongly advise against consideration for rationalisation of staff. We support government initiatives to tax the rich through luxury taxes. More importantly, we are convinced that the surest way to manage the budget under austerity is to reduce the cost of governance.

Bloated prerequisites of political office holders must be cut. Prerequisites and comfort of politicians need to reflect the reality of the times. Mr. President and the state house must lead in this regard. The size of the Presidential fleet, the cost of running the State House and the retinue of political jobbers can all be reasonably cut without reducing the effectiveness of the Presidency.

“We condemn the imposition of exploitative electricity tariff and urge caution in case this leads to some further unpleasantries. We note sporadic protests against these tariff hikes in cities across the nation including Benin, Enugu, Lagos and Kano.

We still stand by our time-tested position that the only permanent solution to the crises of petroleum product pricing is adequate domestic refining. Accordingly, we urge government to put in place realistic appropriate legislation and policy in order to realise this.”


– Vanguard

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