Akani Alaka
On Thursday, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) celebrated the deregulation of the downstream sector of the oil industry with the importation of 27 million litres of Premium Motor Spirit (PMS) known as petrol for local consumption by a local company.
This was in contrast to the monopoly of the importation of the product into the country in the past few years by the National Petroleum Company Limited (NNPCL).
“When we talk about deregulation, people just think about price increase. Actually, it is not; it is opening up the space for more participation,” Bashir Sadiq, the Executive Director, Corporate Services and Administration, NMDPRA said at a ceremony to mark the first importation of petrol into the country by a private operator.
The marketer had taken advantage of the May 29, 2023 ‘subsidy is gone’ declaration in the inauguration speech of President Bola Tinubu to import the 27 million litres of petrol said to cost $17 million into the country. But it is doubtful if most Nigerians will be bothered. Indeed, the initial applause over the display of courage by Tinubu for removing the decades-old subsidy has morphed into anguish and pain for most Nigerians.
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Nigerians were still grappling with the rising cost of living and transportation after the ‘subsidy is gone’ statement led to an increase in the price of petrol from an average of less than N200 to about N520 per litre when the NNPCL further jacked up prices at its outlets to N617 on Monday. Other marketers followed with the adjustment of their prices with the product selling for between N620 and N637 in parts of the country.
The initial increase effected after 29 May led to soaring cost of living, with many motorists being forced to abandon their vehicles due to inability to afford the cost of petrol. On the other hand, many commuters were forced to reduce the regularity of their going out. Indeed, some state government reduced their workdays from five to two or three days a week as a relief for their employees.
According to a recent report by Phillips Consulting Limited, over 90 per cent of Nigerians aged 18 have had to reduce their spending on essential and non-essential items as a result of the increased cost of living. The World Bank had also warned that many more Nigerians would become poor as a result of the hike in the cost of petrol following the removal of fuel subsidy by the Tinubu administration.
Anger Trails Increase In Petrol Price
However, the increase in the price of petrol has further increased the agony of Nigerians. Nigerians were still waiting for the palliatives promised by the government when the latest increase in the price of the product was announced.
Hence, the Nigeria Labour Congress, NLC, described the increase as provocative and designed to worsen the poverty level and hardship Nigeria are passing through.
”We woke up this morning (Tuesday) to the news that NNPCL has increased the pump price of Premium Motor Spirit (PMS) from the hitherto draconian N500/litre to N617/litre. This is despite the suffering and hardship that Nigerians have had to go through as a result of the original hike on May 29, as part of President Tinubu’s inaugural gift to Nigerians. An 18 per cent increase in the price of fuel at this time of great difficulties for our people is sadistic and totally unacceptable,” NLC, in a statement by its president, Joe Ajaero while describing the increase in price as most insensitive and horrendous.
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“What the government has done is capable of pushing Nigerian people to the edge of the precipice and can trigger a raging fire that may overwhelm whatsoever mechanisms the government thinks it has put in place as safeguards,” the NLC said.
Rather than just complain, the Coalition of South East Youth Leaders, COSEYL, a socio-political youth group in the South East Geo-political zone asked the labour unions to call out the youth, traders, students and other students out for mass protest march against the increase in fuel price.
The group noted was petrol was being sold for N198 in fuel stations before President Tinubu assumed office. They noted that the President unilaterally increased the price from N198 to N520 and N550 depending on the state and while Nigerians are still battling with hardship of N520, the price was jacked up to N617.
“If we minus the new President Tinubu fuel price of N617 from N198 of former President Buhari’s old price, the answer is 419. This tells Nigerians the kind of President we are dealing with,” the group said in a statement issued on Wednesday in Owerri, jointly signed by its President General COSEYL, Hon. Goodluck Ibem and the Publicity Secretary, Comrade Okey Nwaoru.
“We must march on the streets of the 36 states of Nigeria including the Federal Capital Territory, Abuja until the fuel price is reversed to the old price of N198 per litre,” said the group.
PDP, LP Fume
The two main opposition parties, the Peoples Democratic Party, PDP and Labour Party, LP also rejected the hike, describing it as an act of provocation by the APC-led administration against Nigerians.
The PDP, in a statement by its National Publicity Secretary of the PDP, Mr Debo Ologunagba said instead of seeking ways to stabilize and grow the economy, the APC administration has abandoned the welfare of Nigerians and left the citizens to the vagaries of market forces and an exploitative cabal.
On its part, the Labour Party said the latest adjustment in the pump price of petrol is just the beginning of the hard times Nigerians will be facing under the APC-led government. “Nigerians do not deserve what they are getting from the present government.
The Labour Party condemns the attitude of the government to its people. This is even coming at a time the Nigerian currency has continued to devalue under the watch of this government,” the party said.
Move to get the price increase reversed failed at the House of Representatives on Wednesday as the lawmakers rejected a motion of urgent national importance, titled ‘The need to investigate the incessant increase in fuel pump price’, moved by Mr Ikenga Ugochinyere at plenary on the issue.
Also, an amendment by another lawmaker, urging the House to direct the NNPCL to suspend the new pump price of N617 and revert to the old price of N540 was rejected when it was put to vote by the Deputy Speaker, Mr Benjamin Kalu who presided over the plenary. However, analysts have predicted that the latest increase in the price of petrol will further worsen Nigeria’s inflation rate which was at a 17-year high of 22.41 per cent in May 2023, according to the National Bureau of Statistics. The situation, according to analysts will be compounded by the declining value of the naira also carried out by the Tinubu administration on assumption of office.
However, NNPCL Group Chief Executive Officer, Mele Kyari foreclosed interventions in the price of the product in an interview with journalists after he met Vice-President Kashim Shettima at the State House in Abuja. “We have the marketing wing of our company. They adjust prices depending on the market realities.
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This is really what is happening; this is the meaning of making sure that the market regulates itself so that prices will go up and sometimes they will come down also. This is what we have seen, and in reality, this is what (how) the market works,” he said.
Governor Hope Uzodimma of Imo State, after a closed-door meeting with Vice-President Kashim Shettima also assured that the gains from the removal of fuel subsidy will be utilized in a way that benefits the citizens, labour, and the economy.
He also said steps were being taken to address the current hardship caused by the increase in food and petroleum product prices and the overall cost of living. According to him, the state and federal governments are working to find solutions.
No Going Back
A spokesperson of the defunct President Bola Tinubu’s campaign, Bayo Onanuga, also foreclosed direct interventions to rein in the ballooning price of petrol in a post on his social media handle on Wednesday.
Rather, he urged Nigerians to be patient and desist from hurling attacks on the Tinubu-led administration in response to the fuel price hike, especially, the promised palliatives.
Onanuga said, “𝗜𝗻 𝘁𝗵𝗶𝘀 𝘀𝗲𝗮𝘀𝗼𝗻 𝗼𝗳 𝗵𝗶𝗴𝗵 𝗳𝘂𝗲𝗹 𝗽𝗿𝗶𝗰𝗲, 𝗜 𝘄𝗮𝗻𝘁 𝘁𝗼 𝗽𝗹𝗲𝗮𝗱 𝘄𝗶𝘁𝗵 𝗼𝘂𝗿 𝗽𝗲𝗼𝗽𝗹𝗲 𝘁𝗼 𝗲𝘅𝗲𝗿𝗰𝗶𝘀𝗲 𝘀𝗼𝗺𝗲 𝗽𝗮𝘁𝗶𝗲𝗻𝗰𝗲. 𝗪𝗲 𝗮𝗿𝗲 𝗮𝗹𝗹 𝗷𝗼𝗶𝗻𝘁𝗹𝘆 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗶𝗻𝗴 𝘁𝗵𝗲 𝗽𝗮𝗶𝗻. 𝗔𝗹𝗹 𝘁𝗵𝗼𝘀𝗲 𝗶𝗻𝘁𝗲𝗺𝗽𝗲𝗿𝗮𝘁𝗲 𝗮𝘁𝘁𝗮𝗰𝗸𝘀 𝗮𝗴𝗮𝗶𝗻𝘀𝘁 𝘁𝗵𝗲 𝗻𝗲𝘄 𝗴𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝗼𝗳 𝗣𝗿𝗲𝘀𝗶𝗱𝗲𝗻𝘁 𝗕𝗼𝗹𝗮 𝗧𝗶𝗻𝘂𝗯𝘂 𝘀𝗵𝗼𝘂𝗹𝗱 𝘀𝘁𝗼𝗽.
“𝗟𝗲𝘁’𝘀 𝗮𝘄𝗮𝗶𝘁 𝘁𝗵𝗲 𝗽𝗮𝗹𝗹𝗶𝗮𝘁𝗶𝘃𝗲𝘀 𝗮𝘀 𝗵𝗶𝘀 𝗴𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝗵𝗮𝘀 𝗽𝗿𝗼𝗺𝗶𝘀𝗲𝗱. 𝗟𝗲𝘁’𝘀 𝗮𝘄𝗮𝗶𝘁 𝘁𝗵𝗲 𝗽𝗮𝗹𝗹𝗶𝗮𝘁𝗶𝘃𝗲𝘀 𝘁𝗵𝗮𝘁 𝘄𝗶𝗹𝗹 𝗳𝗹𝗼𝘄 𝗳𝗿𝗼𝗺 𝗲𝗮𝗰𝗵 𝘀𝘁𝗮𝘁𝗲 𝗮𝘀 𝗺𝗼𝗿𝗲 𝗺𝗼𝗻𝗲𝘆 𝗶𝘀 𝗰𝗵𝗮𝗻n𝗲𝗹𝗲𝗱 𝘁𝗼 𝘁𝗵𝗲𝗺 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝘀𝘂𝗯𝘀𝗶𝗱𝘆 𝘀𝗮𝘃𝗶𝗻𝗴𝘀.
“𝗪𝗲 𝗰𝗮𝗻𝗻𝗼𝘁 𝗴𝗼 𝗯𝗮𝗰𝗸 𝘁𝗼 𝘁𝗵𝗲 𝗵𝘆𝗽𝗲𝗿 𝗳𝗿𝗮𝘂𝗱𝘂𝗹𝗲𝗻𝘁 𝘀𝘂𝗯𝘀𝗶𝗱𝘆 𝗿𝗲𝗴𝗶𝗺𝗲 𝘄𝗵𝗲𝗿𝗲 𝘄𝗲 𝘄𝗲𝗿𝗲 𝘀𝗽𝗲𝗻𝗱𝗶𝗻𝗴 𝗺𝗼𝗿𝗲 𝗺𝗼𝗻𝗲𝘆 𝗼𝗻 𝗽𝗲𝘁𝗿𝗼𝗹 𝘁𝗵𝗮𝗻 𝗼𝗻 𝗿𝗼𝗮𝗱𝘀, 𝗲𝗱𝘂𝗰𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗵𝗲𝗮𝗹𝘁𝗵.
“𝗠𝘆 𝗽𝗲𝗼𝗽𝗹𝗲, 𝗽𝗮𝘁𝗶𝗲𝗻𝗰𝗲, 𝗽𝗮𝘁𝗶𝗲𝗻𝗰𝗲 𝗽𝗹𝗲𝗮𝘀𝗲. 𝗜 𝗯𝗲𝗴 𝘆𝗼𝘂 𝗮𝗹𝗹. 𝗡𝗼 𝗰𝗼𝘂𝗻𝘁𝗿𝘆 𝗵𝗮𝘀 𝗲𝘃𝗲𝗿 𝗺𝗮𝗱𝗲 𝗽𝗿𝗼𝗴𝗿𝗲𝘀𝘀 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝘁𝗵𝗲 𝗽𝗲𝗼𝗽𝗹𝗲 𝗴𝗼𝗶𝗻𝗴 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘀𝗼𝗺𝗲 𝗽𝗮𝗶𝗻𝘀. 𝗢𝘂𝗿 𝗰𝗼𝘂𝗻𝘁𝗿𝘆 𝘂𝗻𝗱𝗲𝗿 𝗧𝗶𝗻𝘂𝗯𝘂’𝘀 𝘄𝗮𝘁𝗰𝗵 𝘀𝗵𝗮𝗹𝗹 𝗰𝗲𝗿𝘁𝗮𝗶𝗻𝗹𝘆 𝗲𝘅𝗰𝗲𝗹,” he said.
The implication, especially with the declining value of the naira is that Nigerians may have to pay even higher prices for petrol in the days ahead.
NEC Announces Palliative Measures
Meanwhile, the National Executive Council (NEC) on Thursday agreed on palliative measures to cushion the effects of fuel subsidy for Nigerians.
The NEC meeting, attended by governors of the 36 states, the Director General of the Nigerian Governors’ Forum, as well as stakeholders from the World Bank and other agencies of government, agreed on cash transfers to Nigerians using the state social registers subject to state peculiarities.
Also, government officials were urged to reduce the cost of governance while the Federal Government will implement a six-month cash award policy for civil servants.
Also, food items grains and fertilisers are to be distributed by state governments at the rate acquired from National Emergency Management Agency (NEMA).
States are urged to initiate policies to tackle the cost of transportation.
Highlights of the NEC resolutions include:
1. Negotiate a new minimum wage for workers.
2. Each state should plan towards implementing a cash transfer programme based on the social register of the state.
3. Cash Award Policy for public servants for 6 months.
4. State Governments to pay public servants outstanding liabilities.
5. Govt should begin to fund MSMEs with single-digit interest rates.
6. Immediate implementation of the energy transition plan which means transiting from fossil fuels vehicles to CNG.