Abuja — The meeting between the Federal Government and Labour over the impending deregulation of the downstream sector of the petroleum industry ended yesterday without any common ground being reached.

The Federal Government, in its bid to drum support for the policy, insisted that deregulation was an inevitable decision because the expenditure being incurred by subsidies cannot be sustained.

It also harped on the need for the diversion of such funds to other areas that are in dire need of development.

The Nigeria Labour Congress (NLC), however, maintained that the policy would impoverish Nigerians since in "Nigerian parlance", it is synonymous with fuel pump price increase.

This was the position at the FG/NLC meeting which held in Abuja yesterday with four ministers and labour leaders in attendance even as the meeting continues today.

Speaking at the meeting, Minister of Petroleum Resou-rces, Dr. Rilwanu Lukman, assured the NLC that the policy was not meant to impoverish Nigerians as it was being intended to improve the welfare of Nigeria in the long run.

He added that the reforms which are being proposed would strengthen the oil sector.

Lukman said they are being introduced on a large scale to eventually make it a sector "which Nigerians would be proud of".

These reforms, he added, would yield results gradually because of the extent of damage that has been done to the system.

"There is no way government would embark on a policy that would impoverish its people. If you consider what is being postulated, the general public stands to be the beneficiaries in the long run. Because of the long period for which these various issues have gone on, we cannot expect it to be completely sorted out in one or two years which is why we have crafted the Petroleum Industry Bill.

"Whether we like it or not, we cannot as a nation continue with the expenditure on subsidy. The money can be put into other uses since we are talking about the condition of our people. We should ultimately take steps that would encourage this," he added.

Speaking at the parley, Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Mohammed Barkindo, disclosed that an expected outcome of the deregulation policy is a capture of 50 per cent of the consumer market share of petroleum products by the corporation in the next three years.

This, it said, would ensure that Nigerians are assured of the availability of petroleum products even in instances where there are shortages, since the corporation would be run as a commercial entity.

He added that the corporation would enter into partnership with willing independent marketers to create more mega stations which would be painted in NNPC colours, and ensure they get adequate supply of petroleum products.

Labour leaders, however, maintained their stance that fuel price increase should not come first before facilities for deregulation are put in place.

Deputy Vice-President of the NLC, Comrade Promise Adewusi, said the movement was not being unduly antagonistic to the policy but was insistent due to the level of poverty affecting Nigerians.

He added that aviation fuel market was deregulated long before now, but that has not ensured a price stability or availability of the product.

"Government is doing the last thing first because there ought to be a viable platform. Deregula-tion has become equal to price increase which would ultimately lead to inflation. It means even if government gives us the N52,200 minimum wage which we are requesting, deregulation would take it all away," he said.

"What assurance do we have that deregulation would do all these things which are being promised?" he queried.

Minister of Finance, Dr. Mansur Muhtar, said the government cannot make its budget based on speculation of crude oil prices due to fluctuation in the global market, while adding that President Umaru Musa Yar'Adua was making moves that would strengthen Nigeria's budget making process.

He added that Nigeria's development had recorded low grades because government agencies in the past were not committed to national development.

"We are not looking to create new agencies, but to strengthen existing ones for efficient delivery. Ministers were not doing anything before, monies were being diverted. Now we are looking at efforts in the budget making process and ensuring the involvement of all stakeholders," he said.

On the 5000mw achievement which has been widely reported by the media, Muhtar clarified that the country has the capacity to generate that output, but it is not being generated because of low gas supplies due to vandalisation.

"Energy remains a key issue and the government is making a lot of efforts to achieve its 6000mw promise to Nigerians. In terms of generation capacity, we have the capacity to generate 5000mw but with gas supply problems which we are experiencing especially due to vandalisation, we are generating less. Deregulation is not an 'Eldorado' for this government, we are involved in many other developmental projects for the country," he said.

The meeting, which also had in attendance Minister of Labour and Productivity, Prince Kayode Adetokunbo, and Minister of State for Petroleum, Mr. Odein Ajumogobia, continues at the labour house in Abuja today.