The Natural Oil and Gas suppliers Association of Nigeria NOGASA is seriously concerned about recent trends and developments in the down stream sector of the industry, which if not properly handled will adversely affect their businesses, workers and the Nigerian economy at large.
Of most serious concern is the price instability plaguing the market.
Since the onset of Covid-19 , we have been hit hard with a very drastic downturn in business revenue which has been exacerbated by the unpredictability of the pricing regime for trading in PMS.
The last reduction in pump prices during the month of march at the height of the Covid-19 global pandemic, was disastrous for most business investors in the down stream sector.
The industry incurred heavy losses of over N320billion after purchasing products at government specified prices, only to be compelled to sell at reduced prices, which could not be justified by the costs of transaction.
Numerous businesses are dying in silence since then. If you take a look around, you will find out that a lot of them are no longer trading as a result of the heavy losses. This also translates into loss of jobs in the sector.
To make matters worse, the price reduction was virtually promulgated without notice, so, many businesses were caught by surprise and could no longer sustain operations.
Those losses were never refunded by the government and some companies were forced to shutdown operations and lay off workers.
It is in light of these negative outcomes to the entire Nigerian economy that we appeal to the NLC/TUC to reconsider their proposed action over the increase in petroleum pump price and electricity rates by the government.
We believe at that it will be counter- productive at this juncture, because it will create far more problems for workers and businesses that employ them than it seeks to solve.
For an already embattled sector to recover from the ravages of the Covid-19 global pandemic, we plead caution at this critical stage to avoid creating more problems than solutions – we seek to avoid actions that can trigger more lay offs, and loss of revenue to businesses and workers alike.