Minister of State, Petroleum, Dr. Ibe Kachikwu, briefing newsmen on the new fuel price, yesterday, in Abuja.
While some hailed the government decision, as they see it as a way of addressing the perennial fuel crisis in the country, others believe that the decision was hasty and insensitive.
Meantime, petrol stations in most parts of the country have adjusted their pumps to the new fuel price of N145 per litre.
This came as the federal government, yesterday, stated that the real cost of petrol in the country was N243.05 per litre. In Lagos, yesterday, very few stations with the product sold for N145 per litre.
While motorists bought with ease in some of the petrol stations, some other stations still witnessed long queues which had resurfaced a few days ago, after initially easing out. It was also gathered that many petrol stations sold no fuel because they had run out of stock, according to some of the fuel attendants. Of the over 53 petrol stations visited by Vanguard, yesterday, only four sold the product, including Forte, Rain Oil and Mobil.
Consequently, the streets of Lagos were virtually empty as only very few vehicles were on the road. A motorist, who didn't want his name in print, said he was at a petrol station in Ikeja where people refused to buy the product, even when there was no queue, saying it was too expensive.
The government in a document obtained from the PPPRA in Abuja, also explained that the decision to undertake the recent increase in the price of petrol was reached after a comprehensive study of the costs of importation and in furtherance of the price modulation framework started in January 2016.
Actual price of petrol On the actual cost of PMS, the PPPRA said: "The estimated 'true cost of PMS was valued at N243.05 per litre. This is factoring the estimated average time spent to obtain PMS at the official price, which was N86.50 per litre; the estimated hourly wage of the average Nigerian; the average price of PMS on the black market and the estimated average volume bought by visit to the filling stations and also factoring in the frequency Nigerians source PMS from different markets."
The PPPRA debunked reports that the downstream petroleum sector had been deregulated, stating that the Federal Government would, through this new price regime, ensure that the price of products was monitored and modulated to ensure that citizens got fair value for the products they purchased.
To this end, the National Secretary, Independent Petroleum Marketers Association of Nigeria, IPMAN, Alhaji Danladi Garba Pasali, called for a total deregulation of the sector, allowing market forces to determine price.
According to him, this will help ensure efficiency in the sector. Speaking to Vanguard in a telephone interview, he said: "The government should just remove its hand from the oil sector because 80 to 85 per cent of marketers are not getting the product at the amount being regulated. "So, the best thing to do is to deregulate the system, so that people can compete and bring in product, to reduce prices in the market. What we are saying is that they should open up the industry that will bring investment and ensure an attractive environment where investors could come in and invest. "It would also ensure that people are attracted into investing and building refineries in the country. But with all of these regulations and other bottlenecks, it does not help the system function to its full capacity. We have been on this issue for a long time and have seen how people manipulate the regulations to exploit the masses and loot the treasury. "We are saying that subsidy should be removed to bring about a level environment that will be determined by the forces of the market." Also speaking, a petroleum economist and President, Nigerian Association for Energy Economics, NAEE, Professor Wumi Iledare, condemned the decision of the Federal Government to continue regulating the price of the product, saying it was detrimental to the growth and sustainability of the petroleum sector. He said: "This is not a way to develop policy that will be sustainable for the petroleum sector. I do not think they should have fixed any price, but the government should have given a band that this is the situation of the market other than setting the price which should not have been the case. "We should know what the equilibrium prices are in the market and then you set the price. If they want to deregulate, they do not need to set the price. "If they are really talking about deregulation, let the market set the price and not the government. Right now, everybody will go on the new price. Suppose they said it should be between N130 to N145 per litre, it will be good rather than fixing a price for the commodity." He further argued that the market was full of uncertainty and unrealistic. According to him, the Federal Government should have adopted partial deregulation if it could not afford full deregulation of the sector. "Suppose the price of crude reduces to $30 per barrel, can you force the market to move downwards? "The government had over the years, made same mistake repeatedly. At least, what they should have done is a partial deregulation. Those who want to go to NNPC to buy at N145 should go and the private sectors should be allowed to sell at their price."
Also speaking, Professor Adeola Adenikinju, Director, Centre for Petroleum, Energy Economics and Law, CPEEL, University of Ibadan, called for the deregulation of the downstream petroleum sector to allow for increased private sector participation. He argued that the fuel subsidy regime was unprofitable and wasteful and should be eliminated totally.
NLC, TUC, NANS, Fayose, Falana, others react
Among those who expressed anger over the price increment were human rights activist and Lagos lawyer, Mr. Femi Falana, SAN; Governor Ayo Fayose of Ekiti State, Nigeria Labour Congress, NLC, Trade Union Congress, TUC, Labour Party, National Association of Nigerian Students, NANS, and members of both arms of the National Assembly. While Mr. Femi Falana declared that the new fuel price regime was illegal, the Labour movement, comprising NLC and TUC, said it would mobilise its members against the price increase. Similarly, NANS said it would mobilise students across the country against the increase next week, should government fail to reverse the decision.
On its part, the Joe Ajaero-led faction of NLC,called on workers and other Nigerians to rise against the N145 per litre of petrol, adding that the increase came as a rude shock to Nigerians. According to Ajaero, the action of the government can only be described as inhuman and callous. In a statement by the factional President, Ajaero said an emergency Central Working Committee, CWC, and National Executive Council, NEC meetings of the Congress had been fixed for today and tomorrow to enable members craft the needed strategy and receive all the needed directives to embark on chosen course of action against what he described as wickedness.
The statement contended that Congress "cannot now abandon Nigerian masses who have reposed so much trust and confidence in us to protect and deliver them from the hands of mindless politicians and businessmen."
In its reaction, TUC rejected the hike in price and vowed to mobilize forces with other concerned Nigerians to fight against it. It also dismissed report that labour was part of the decision that brought about the new price regime of N145 per litre. Giving details of what transpired at Wednesday's meeting in the office of the Vice President, Yemi Osinbanjo, where the price was reached, TUC in a statement by its President and Acting Secretary General, Bobboi Bala Kaigama and Simeso Amachree, respectively, said: "The Congress wants to use this opportunity to put the records straight concerning the development.
Organised labour received a 24-hour notice inviting us to meet with Vice President Osinbajo and some other key government functionaries, including the Minister of Labour and Employment, the Minister of Information, Chairman of the Governor's Forum, and the Minister of State for Petroleum. "Others include the principal officers of the National Assembly, led by the Deputy Senate President, Speaker of the House of Representatives, and chairmen of the respective Committees on Petroleum in both chambers of the National Assembly.
"The meeting held, yesterday (Wednesday). The call for meeting stated no specific agenda, and we were left to conjecture. Little did we know that the government had already concluded plans to hike the price of petrol. Indeed, we were taken aback."
Similarly, NANS, yesterday, said the over 40 million Nigerian students would re-enact the Occupy Nigeria protest against the removal of subsidy from petroleum product next week. National President of NANS, Comrade Tijani Shehu, stated this in Abuja, at a protest rally where the association called for the removal of the Minister of Education, Malam Adamu Adamu.
He said NANS was already mobilizing Nigerian students to resist the new N145 per litre pump price of petrol.
According to him, "a directive has been issued to all tertiary institutions to shut down all campuses on Tuesday and Wednesday, next week.
After that, they will all converge on Abuja for a mass protest."
Ekiti State governor, Mr Ayodele Fayose, also, yesterday, called on Nigerians, especially organized labour to resist the new pump price of petrol, saying the arbitrary price increase was not only insensitive but also wicked. Fayose, who described the increment as a " wicked act of President Buhari and his party", added that "those who opposed removal of fuel subsidy in 2012 and funded the Occupy Nigeria protest must not be allowed to get away with this imposition of hardship on Nigerians now that they are in power." Similarly, the national leadership of Labour Party expressed shock and displeasure over the increase in the price. The party in a statement signed by the National Chairman, Abdulkadir Abdulsalami, and National Secretary, Julius Abure, read: "After critically analyzing the issues involved, we have come to the inevitable conclusion that the new price for PMS is unwarranted, unnecessary and unacceptable, especially at this time when our people are grasping with the harsh social economic conditions occasioned by poor leadership." While Chairman, Senate Committee on Petroleum Resources, Senator Omotayo Alasoadura, APC, Ondo Central, said the pains for Nigerians would be shortlived once the product was made available in large quantity, Senator Shehu Sani, APC, Kaduna Central, described the price increase as not only insensitive but also punitive. Meanwhile, security men were deployed all over Abuja to forestall angry protest over the price increase of petrol.
