- Action a betrayal , says NLC
On the day Dangote Refinery commenced the supply of petrol with a promise to make the product available in the market in 48 hours, the Nigerian National Petroleum Company (NNPC) Limited filling stations adjusted their meters to reflect new prices.
This action was amid a long-running scarcity of the product across the country.
There was no word from the national oil company on the new price regime.
The company only later in the day denied issuing a city-by-city price template which was circulating on social media.
Independent Petroleum Marketers Association of Nigeria (IPMAN) spokesman Ukadike Chinedu said NNPCL had not officially informed members about the price increase.
He said depot owners and marketers were awaiting further directives from the company.
Experts, however, gave reasons the oil giant might have effected the price change.
Petrol which sold for N568 at NNPCL filling stations in Lagos went for N855 per litre.
In Abuja where it sold for N617, the oil firm’s filling stations moved the price to N897.
The upward review came after NNPCL at the weekend admitted owing suppliers $6 billion, as a result of which they were reluctant to make the product available to them.
The company warned that the situation could result in its inability to make the product available to Nigerians.
The firm’s Chief Financial Officer (CFO) Umar Ajiya previously said the NNPCL was taking care of the shortfall in the supply system and was selling petrol at half the landing cost.
The Nigeria Labour Congress (NLC) rejected the new price.
It called for its immediate reversal.
NLC President Joe Ajaero in a statement described the increase as a “betrayal” after the Federal Government promised no pump price hike as a condition for the N70,000 minimum wage.
Other marketers jacked up prices to N897 per litre following NNPCL’s adjustment – by over 30 per cent.
The Minister of State (Petroleum) Heineken Lokpobiri denied that the Federal Government directed NNPCL to peg fuel prices at N1,000.
His media adviser Nnemaka Okafor described the reports as “blatantly false and malicious claims regarding petroleum pricing directive.”
“The Ministry of Petroleum Resources does not, and will not, interfere in the internal decisions of NNPCL, including pricing matters,” he said.
Some stakeholders said the increase was unavoidable.
They believe it will help alleviate the subsidy burden on both the Federal Government and the NNPCL.
An oil and gas consultant, Henry Adigun, said while the price increase was a step towards addressing the subsidy issue, it did not resolve the need for total deregulation of the downstream petroleum sector.
“Unless market prices align with international product prices, NNPCL will remain the sole importer,” Adigun said.
He welcomed the commencement of petrol production by Dangote Refinery but noted that supply would hinge on favourable market conditions.
‘Subsidy would have grown to N10t by the end of the year’
Managing Director of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, urged Nigerians to show understanding with the Federal Government in this “difficult period”.
According to him, the government was subsidising every litre of petrol with about N500 while the product sold for between N610 to N700.
He warned that subsidy payment would have risen to between N8 trillion and N10 trillion at the end of the year should the country continue on that trajectory.
Yusuf said: “The subsidy figure rose to this level because of the depreciation of the naira as all the petroleum products consumed locally are imported.
Read Also: UPDATED: NNPCL adjusts petrol pump price to N897/L
“Secondly, the price of the products locally and the West African sub-region had widened and it is sold at an equivalent of between N1300 to N1500 per litre.
“The incentive for smuggling is very high and with our huge porous border and waterways largely unmanned there is little or nothing those entrusted with that duty can do.
“In this scenario, the government was not only subsidising her citizens but the whole of the West African sub-region up to the Central African Republic.
“This is part of the dilemma the government is faced with.”
To him, there is a possibility the government will be subsidising petrol to an extent with the new price of N855 per litre.
Yusuf said: “This must be a tipping point for the government as it was almost going bankrupt. This much the NNPC admitted with the over $6 billion debt.
“The situation in which we have found ourselves is not palatable to either citizens or the private sector because of the high cost of operation.”
He expressed optimism that Dangote Refinery and others in the pipeline will help the government ensure the pump price does not go beyond this.
Yusuf called on the government to roll out fiscal policies that would enable citizens to transit to other energy uses such as CNG, LPG, renewable energy solutions and wind power.
He said: “We need to subsidise this so that people can move away from fossil fuel. Again government do not have any choice now but to adopt an effective logistics and transportation strategy to ensure that products get to the people on time unlike now where it takes between one to two weeks to get petroleum products to other cities across the country due to the collapse of the railway and rusted pipelines.
“All these no doubt increase the cost. I will only appeal to Nigerians to be a little more patient as the government is no doubt on the right track to grow the economy.”
Black marketers in Abuja sold petrol in 10-litre containers for N13,000.
Despite the hike, retail outlets recorded endless queues that increased transport fares.
Kubwa bus stop to Byazhin Across that was N300 by tricycle rose to N500.
Kubwa to Berger which was previously N600 soared to N800 while Kubwa to Nyanya which was N800 rose to N1,000.
NLC demands reversal
NLC said it felt betrayed by the Federal Government following the latest increase in the pump price of petrol.
In a statement by Ajaero, the Labour Centre urged the government to reverse the increase in prices.
Ajaero said the organs of the NLC would meet in the coming days and decide on its next move.
He said: “We are filled with a deep sense of betrayal as the Federal Government clandestinely increases the pump price of PMS.
“One of the reasons for accepting N70,000 as the national minimum wage was the understanding that the pump price of PMS would not be increased even as we knew that N70,000 was not sufficient.
“We recall vividly when Mr President gave us the devil’s alternatives to choose from: either N250,000 as minimum wage (subject to the rise of the pump price between N1,500 and N2,000) and N70,000 (at old pms rates), we opted for the latter because we could not bring ourselves to accept further punishment on Nigerians.
“But here we are, barely one month after and with the government yet to commence payment of the new national minimum wage, confronted by a reality we cannot explain.
“It is both traumatic and nightmarish.
“Yet, when we told the government that its approach to resolving the fuel subsidy contradictions was patently faulty and would not last, its front-row cheerleaders sneered at us, saying we did not understand basic economics.”
