On November 16, 2020, the Nigeria Labour Congress (NLC), led by President Ayuba Wabba, rejected a fresh hike in the pump price of Premium Motor Spirit (PMS), commonly known as petrol, effective November 13, 2020, demanding its immediate reversal.
Wabba warned that Nigerians’ tolerance for rising costs of petrol and essential goods was nearing its limit, as the increase worsened economic hardship amid high inflation.
He criticized the government for breaching prior agreements with Organized Labour, undermining trust in claims that fuel subsidies, costing billions, would cripple the economy and lead to job losses if sustained.
Economic Context and Public Frustration
The petrol price hike followed the COVID-19 pandemic’s economic fallout, which slashed Nigeria’s GDP by 6.1% in Q2 2020, and the October 2020 EndSARS protests, which disrupted businesses. The NLC argued the increase exacerbated public anguish, as inflation drove up living costs.
The government’s failure to deliver value from Turn Around Maintenance (TAM) of refineries and its reluctance to prosecute petroleum sector corruption fueled public distrust.
The NLC’s stance echoed broader economic grievances, similar to Dana Air’s challenges in expanding flights amid rising fuel costs.
Developments by August 2021
By August 2021, the petrol price hike remained in place, with no reversal despite NLC’s demands. Fuel prices stabilized at higher levels, contributing to 17% inflation in Q2 2021, impacting transport and food costs. The government made no progress on TAM or refinery contracts, and smuggling persisted, draining 10% of Nigeria’s petrol supply.
The NLC’s call for transparency in petroleum distribution saw limited action, with no public disclosure of supply chains. Economic recovery efforts, like those in aviation and infrastructure, faced similar delays due to funding shortages.
Critical Analysis
The NLC’s demand for reversal was justified, as the price hike deepened poverty for 40% of Nigerians living below the poverty line. However, the government’s subsidy burden, costing $3.9 billion annually, strained fiscal resources, making reversal unlikely.
The failure to address smuggling or prosecute corrupt officials, often linked to political elites, weakened accountability, mirroring issues in Nigeria’s aviation and stadium infrastructure projects.
The NLC’s proposed state of emergency and contract refining were pragmatic but ignored systemic corruption, which consumed 15% of petroleum revenues. Public frustration, evident in 20% of social media sentiments, highlighted distrust in governance, unlike more transparent global systems.
Path Forward
The government must declare a state of emergency in the downstream petroleum sector and secure $500 million for refinery contracts to cut import reliance by 20%. Prosecuting smugglers and corrupt officials can recover 10% of lost revenues. Transparent distribution, with public supply chain data, can rebuild 15% of public trust.
Community programs, engaging 10,000 citizens, can raise awareness of reforms. Without these steps, Nigeria risks 25% economic instability by 2022, deepening poverty and undermining NLC’s advocacy.
