Fuel marketers across the country adjusted their pump prices on Thursday to between N158 and N162 per litre of petrol, saying a further increase in global crude oil prices would push the pump price of petrol higher.
Petrol prices have increased for three straight months, rising from N121.50–N123.50 per litre in June to N140.80-N143.80 in July, N148-N150 in August and N158-N162 in September.
The Petroleum Products Marketing Company, a subsidiary of the Nigerian National Petroleum Corporation had, on Wednesday, increased the ex-depot price of Premium Motor Spirit (petrol) to N151.56 per litre from N138.62 per litre but later reduced it to N147.67.
The ex-depot price is the price at which the product is sold to marketers at the depots.
When the collapse of global crude oil prices triggered the reduction of the pump price of petrol from N145 per litre to N125 in March, the Petroleum Products Pricing Regulatory Agency said it would advise the NNPC and oil marketing companies on the monthly “guiding retail price” at which the product shall be sold across the country.
The Minister of State Petroleum Resources, Timipre Sylva, in a statement on May 15, said deregulation was approved on March 19 this year.
“But as you all know, PMS and other petroleum products are very strategic commodities, so you cannot allow the prices of these commodities to be determined wholly by the marketers,” he added.
In June, the Executive Secretary, PPPRA, Abdulkadir Saidu, said, “For the avoidance of doubt, it is instructive to state that no private individual or group has the mandate to fix prices of petroleum products, however, the statutory regulatory body is saddled with the responsibility of advising guiding prices.”
But the PPPRA failed to issue any guiding prices in August and September and has remained silent since then, despite repeated calls and messages sent to the agency by one of our correspondents on the issue.
The spokesperson of the agency, Kimchi Apollo, however, told our correspondent on Thursday that he would get information on the development and revert. He had yet to do so as of the time of filing this report.
The National Operations Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, told one of our correspondents that the increase in petrol pump prices was a reflection of the global oil prices.
“In July, the crude oil price was around $43 per barrel. But rose to about $44-$45 in August. Last Monday, it increased to $46. If the crude oil price falls to $40, petrol prices will come down. But if it goes up to $50, we should be expecting petrol price to rise to about N163 per litre if the exchange rate remains the same,” he said.
Osatuyi stressed the need for government to create a level playing field by allowing marketers to also have access to foreign exchange at the official rate like the NNPC to enable them to import products.
The Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, said earlier on Thursday that pump prices would have to be adjusted to reflect realities of the increase of ex-depot prices by PPMC.
“However, the magnitude of the increase, timing and location is a decision left to each company. Consistent with global best practices, MOMAN does not dictate prices to its members as this would be anti-competition in a fully deregulated market.
“We welcome government’s action in allowing the market to determine prices, as we believe it will prevent the return of subsidies, while allowing operators the opportunity to recover their costs. This will, in the long run, encourage investment and create jobs,” he added.
But a groundswell of public opposition across the country have greeted the hike in petrol prices.
TUC Says Government Action Wicked, Demands Immediate Reversal
The Trade Union Congress of Nigeria condemned the increase in petrol price and electricity tariff in the country.
In a statement titled, ‘Killing the dead,’ and signed by its president, Quadri Olaleye, and Secretary-General, Musa-Lawal Ozigi, the TUC said, “Like the book by George Orwell, titled ‘1884’, the government and its agencies have resorted to doing the opposite of what they were set up to do.
“Government, instead of providing welfare, is killing the people systematically.”
It said increasing petrol prices and electricity tariffs, among others, “at a time people are losing jobs, businesses are not moving in the light of COVID-19, is, to say the least, wicked.”
The union said, “In droves, Nigerians flee the shores of this country. Just two days ago, we protested the hike in electricity tariff and sadly, yesterday, they slammed us with fuel [price] hike at a time countries like Ghana and Canada are giving out palliatives to cushion the effects of coronavirus pandemic. It is difficult to cope in this circumstance.
“Do we still wonder why unemployment and insecurity have increased? This is disgustingly shameful. We urge the government to listen to the voice of reason and reverse the [petrol] price immediately.
“Stop pushing Nigerians to the wall. This is too daring. The congress is calling a meeting of its organs to take decisions on this obnoxious move. The dead are dying again; stop killing the dead!”
We Can’t Fund Petrol Subsidy, Says FG
The Federal Government said on Thursday that it lacked funds to subsidise the cost of PMS.
The minister, Sylva, told journalists that since the introduction of the deregulation policy, Nigeria had saved about N1tn.
He said the saving came following the removal of subsidy and the expulsion of N500bn earmarked for subsidy payments in the 2020 budget, adding that the removal of foreign exchange differentials also saved the country about N500bn.
Sylva further revealed that plans to merge the PPPRA and the Petroleum Equalisation Fund into one agency called “The Authority,” had reached an advanced stage.
He assured Nigerians that the government was working hard to address the concerns in the downstream oil and gas sector.
He said, “It became necessary that the country cannot sustain subsidy payments, hence the decision to deregulate. Government has stopped subsidising petrol at the pump.
“It will now play its traditional role of protecting consumers from exploitation by ensuring that marketers do not profiteer at the expense of ordinary Nigerians and consumers of the product.”
Sylva said the government had stepped back in terms of price fixing for petrol, adding that market forces and crude oil price would continue to determine the cost of PMS.
Ogun Governor Backs FG’s Actions
The Governor of Ogun State, Dapo Abiodun, however, backed the decision to hike electricity tariff and fuel price.
Abiodun, in an interview with State House correspondents after a meeting he had with the President on Thursday at the Presidential Villa, Abuja, said, “First, you want to enjoy lower prices when the prices of crude are low and then not want to pay for a slight increase when there is an increase in price of crude.
“The price of crude is directly proportional to the price of refined products. So, I believe that is what is happening at the moment.”
On electricity tariff, he said Nigerians must decide what they want.
“We all complain that we are not generating enough electricity and we all complain about the fact that we don’t have the right infrastructure to transmit electricity, we complain about the fact that the distribution companies do not seem to be efficient.
“The problem is because, perhaps, the pricing is not right. If you want people to invest in production of gas, in gas floatation, which our turbines and our power plants rely on, we must ensure that the entire value chain is profitable.”
Senators Plan Protest
The Senate leadership kept sealed lips on Thursday over the sudden increase in electricity tariff and petrol prices, about 48 hours after the relevant agencies effected the upward review.
The Senate had in its resolution which was promptly sent to the President, Major General Muhammdu Buhari (retd.), in July, prevailed on the National Electricity Regulatory Commision and the distribution companies to suspend the planned tariff hike till the first quarter of next year.
But NERC ignored the resolution and approved the increase in electricity tariff from N22 per kilowatt-hour to N66 per kWh, with effect from September 1.
However, several efforts made by one of our correspondents to get the official reaction from the Senate were not successful on Wednesday and Thursday as the Senate spokesperson, Senator Ajibola Basiru, declined comment on the issue.
Basiru promised to respond to our correspondent’s enquiries on phone but he had yet to do so as of the time of filing this report.
He did not also respond to the text message sent to him on the issue.
Similarly, the Chairman of the Senate Committee on Power, Senator Gabriel Suswan, could not be reached for comment but his Deputy, Senator Eyinnaya Abaribe, said the Senate would release a comprehensive statement on the issue.
He said, “I have spoken with the management of NERC, and they have assured us that they will brief us on what they have done.
“We will wait until they brief us as a committee before we can speak on the issue.”
Meanwhile, indications emerged on Thursday that some senators were planning to protest the fuel price hike as well as increase in electricity tariff.
They were also said to be canvassing an emergency reconvening of plenary, ahead of their September 15 resumption date, to discuss the issue.
A senator, who spoke on condition of anonymity, told our correspondent on Thursday that some of his colleagues were planning a protest through a press conference to reject the hike.
He said, “Serious consultations are going on at the zonal caucuses about the protest. We may call for emergency reconvening because we are under pressure from our constituents.
“We were disappointed in the hurried manner in which the fuel price hike was done without regard for consultation with the National Assembly.”
The Senate spokesperson, when contacted, said he was not aware of the planned reconvening of plenary.
“I’m currently in Imo State for an APC assignment. I’m out of touch. I can’t confirm whether or not an emergency sitting will be called by the Senate since I’m not in town and not in touch,” he said.
FG Is Insensitive – Senator Ogba
The Chairman of the Senate Committee on Sports, Obinna Ogba, told reporters on Thursday that the price hike indicated that the Buhari regime was insensitive to the plight of Nigerians.
He said, “The increases in electricity tariff and fuel price at a time the economy was yet to recover from the deadly effects of COVID-19 showed that the government is highly insensitive.
“The country and indeed the whole world is facing serious problem right now because of the coronavirus pandemic. Therefore, these increases are not good at all. It is adding salt to injury.”
Also on Thursday, a former Deputy National Publicity Secretary of the All Progressives Congress, Timi Frank, urged the leadership of the organised labour in Nigeria to mobilise and shut down the country in reaction to astronomical hike in fuel price and electricity tariff.
Buhari Govt Worse Than Military – Ekiti PDP
The Peoples Democratic Party in Ekiti State on Thursday condemned the hike in petrol price without consideration for the poor masses, saying it was indicative that the Buhari-led All Progressives Congress government was worse than military regime.
The factional PDP State Chairman, Bisi Kolawole, who spoke through the faction’s Publicity Secretary, Raphael Adeyanju, in Ado Ekiti, said, “It is only a government that is sadistic and thinks less of its citizens’ welfare that would bring such a harsh policy under a debilitating economy caused by coronavirus pandemic.
“This is an eye opener for all Nigerians that the APC government was a mistake. It should be voted out in 2023, because no power is greater than the will of the people.”
But the APC State Publicity Secretary, Ade Ajayi, said Buhari had been devising ways to clear the mess left by the 16 years of PDP misrule in the country, urging Nigerians not to listen to the opposition, which he said was ignorant of the running of petrol economy.
Ajayi said, “The PDP is only acting and basing its criticisms on ignorance.
“The petrol prices are not determined by government solel; it is by market demand and supply forces.
“This government is trying to clear the mess left by the PDP government and gradually, we would see the gains.
“So, the PDP should stop this shameful act, because Nigerians won’t listen to its noise.”
Price Hike Could Heighten Insecurity – ActionAid
ActionAid Nigeria, a humanitarian non-governmental organisation, said the increase in petrol price could further heighten insecurity in the nation and further explosion of crisis.
It said in a statement, “ActionAid Nigeria totally condemns the hike in fuel prices. We are not out of COVID-19, a lot of citizens are losing their jobs, people are getting poorer, more responsibility with school closure, young people roaming the streets unemployed and fuel hike at this time is shocking.
“We are dealing with too many increases at the same time and this is introducing so much inflation into our lives. Governance is about the people. Instead of dealing with insecurity, we are taking actions that will further heighten insecurity.”
It added that as the inflation goes up and more people are plunged into poverty, there would be more conflict in the society.