With End Of Subsidy, NNPC Raises Petrol Price To Between N488 And N557 Per Litre
- Workers insist on status quo as FG, NLC meeting is deadlocked
- You can’t ask partner to negotiate at gunpoint, says Ajaero
- HURIWA condemns upward review of pump prices
- NECA cautions against escalation of inflation
- MOMAN urges Nigerians to tighten belt, cut consumption
Nigerian National Petroleum Company (NNPC) Limited, yesterday, adjusted the pump price of petrol by nearly 200 per cent, from N195 per litre to between N488 and N557 nationwide.
Thisdaylive.com reported that the development followed the announcement by President Bola Tinubu during his inaugural address on Monday that fuel subsidy was “gone”. Tinubu promised to re-channel the expected savings to education, health and other sectors.
But Nigeria Labour Congress (NLC) expressed displeasure over the NNPC pricing template, describing it as vexatious. NLC President, Joe Ajaero, in a statement, said the union was worried that the Tinubu administration, despite on-going meetings of stakeholders in the oil and gas sector to try to manage the unilateral decision of the government to end fuel subsidy, went ahead to announce a new regime of prices.
Ajaero declared that you could not ask a partner to negotiate at gunpoint.
At the same time, Human Rights Writers Association (HURIWA) condemned the price review as wicked, obnoxious, brutish, and absolutely unacceptable. HURIWA called on Nigerians not to suffer and smile or die in silence but to take peaceful steps to demonstrate publicly against the wicked act of the new government.
In a similar vein, Nigerian Employers’ Consultative Association (NECA) called on the federal government to approach the removal of petrol subsidy strategically to avoid the escalation of inflation and worsening of already bad socio-economic indicators, like employment, and poverty per capital income, among others.
However, Major Oil Marketers Association of Nigeria (MOMAN) advised Nigerians to adjust themselves to the new reality for the good of the country’s economy.
NNPC said it had been funding subsidies to the tune of N400 billion monthly. Group Chief Executive Officer of NNPC, Mele Kyari, disclosed that the federal government still owed the firm N2.8 trillion spent on petrol subsidy.
Kyari lamented that since the provision of the N6 trillion in 2022, and N3.7 trillion in 2023, the national oil firm had not received any payment whatsoever from the federation. He said NNPC made the petrol subsidy payments from its cash flow.
He said, “That means the federal government is unable to pay and we have continued to support this subsidy from the cash flow of the NNPC. That is, when we net off our fiscal obligations of taxes and royalties, there is still a balance that we are funding from our cash flow. And that has become very difficult and it is affecting our other operations.”
In a schedule, seen by THISDAY, detailing the new rates, petrol prices were adjusted upward from between N189 to N194 per litre to N537 in Abuja and other North-central states.
In Lagos and other South-west states, a litre of petrol now sells for between N488 and N500 per litre.
In the South-east, the price will range from N515 to N520, while in the North-west, the price of the product was raised to between N540 and N545. In the North-east, it moved from N199 to from between N550 and N557 per litre.
For the South-south, petrol is now from N511 to N515 per litre.
Nigeria’s subsidy budget of N3.6 trillion for this year, expires in June 2023.
Seventeen months ago, former President Muhammadu Buhari shifted the implementation of subsidy removal by 18 months, which would effectively expire this month.
However, it is expected that other independent and major marketers will charge more for petrol, following the pattern in the past, where NNPC prices are usually lower than the NNPC rates.
Confirming the price hike through its Chief Corporate Communications Officer, Garba Deen Muhammad, NNPC informed its customers that it had adjusted its pump price across the retail outlets, “in line with the current market realities.”
Muhammad stated, “As we you strive to provide you the quality service we are known for, it is pertinent to note that prices will continue to fluctuate to reflect market dynamics.
“We assure you that NNPC Limited is committed to ensuring ceaseless supply of products. The company sincerely regrets any inconvenience this development might have caused.
“We greatly appreciate your continued patronage, support and understanding through this time of change and growth.”
It was not immediately clear what the current ex-depot price was at the moment to determine the price of the commodity in other filling stations owned by major and independent products marketers.
Ex-depot price is the cost paid by independent petroleum products marketers to lift products from NNPC fuel depots before transportation to their retail outlets for distribution. At the moment, NNPC is the sole importer of petroleum products.
Usually, to arrive at the final retail price at the filling station, the marketers would add the cost of transportation, storage, throughput charges and other charges spelt out in the pricing template by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
For years, especially during the Goodluck Jonathan era, Tinubu was a prominent critic of the subsidy removal attempts. He supported nationwide protests at the time against the move by Jonathan government.
The chaotic reaction to the removal of petrol subsidy announced by Tinubu on Monday continued, with many filling stations across the country still hoarding the product, while the few that opened to customers sold at exorbitant prices.
Fuel retailers have shut their gates to motorists, thus worsening the petrol situation nationwide. Many filling stations in Abuja had customers’ vehicles queuing to by fuel extending several kilometres.
Commuters were stranded at various bus stops nationwide.
NLC expressed displeasure over NNPC’s new pricing template, describing it as vexatious.
Ajaero, in a statement, said the union was worried that Tinubu, despite the on-going meetings of stakeholders in the oil and gas sector to try to manage the unilateral decision by the government, went ahead to announce a new regime of prices.
He described it as an “ambush”, stating that it runs against the spirit and principles of social dialogue, which remains the best platform available for the resolution of all the issues in petroleum downstream sector.
Ajaero stressed, “Government cannot in one breathe be talking about deregulation and at the same time fixing the prices of petroleum products. This negates the spirit of allowing the operation of the free market unless the government has as usual usurped, captured or become market forces.”
He said it was unacceptable, insisting that good faith negotiation is key to reaching any agreement.
The NLC president stated, “What the government has done is like holding a gun to the head of Nigerian people and bringing them under pressure. We call on the federal government to immediately instruct the NNPC to withdraw this vexatious pricing template to allow free flow of discussions by the parties.
“Nigerians would not accept any manipulations of any kind from any of the parties, especially from the representatives of the government.
“Our commitment to this process is buoyed by the fact that all the parties would be committed to ensuring that it is carried out within the ambits of liberty without undue pressure.
“The release of that template may not allow us to continue if nothing is done to withdraw it so that the dialogue can continue unhindered. It is clear that government is actually trying to scuttle the process.”
According to the labour union, as it stands, the federal government has become fixated on its chosen course of action. It said such attitude would in no way help consultations and dialogue.
“There must be flexibility to allow concessions and reasonable accommodation that will produce the best result for the Nigerian people. This is what we all seek at this time,” Ajaero asserted.
NECA Cautions against Escalation of Inflation
Nigerian Employers’ Consultative Association (NECA) called on the federal government to approach the removal of petrol subsidy strategically to avoid the escalation of inflation and worsening of the already bad socio-economic indicators like employment, poverty per capital income, among others.
A statement issued yesterday by Director General of NECA, Mr. Adewale-Smatt Oyerinde, warned that if the subsidy withdrawal was not well managed, it could lead to an increase in the prices of goods and services with consequential effects on purchasing power.
Oyerinde stated, “While it is desirable to remove the fuel subsidy, which in real terms is subsidising inefficiency and corruption, it is important that the removal is systematically and strategically done in order not to further impoverish and worsen the already bad socio-economic indicators, such as employment, poverty per capital income, and many more.
“It is worrisome to note that prices of other commodities have skyrocketed a few hours after the president’s pronouncement of subsidy removal. Consequently, it is critically important that the new government approaches the removal of the subsidy with caution to circumvent further degeneration in the economy.
“We reiterate that in the spirit of frontally addressing corruption, as stated in the president’s inaugural address, efforts should be stepped up to complete the rehabilitation of the refineries to complement the Dangote Refinery that just came on board recently. With the measure, it will be possible to attain scale in PMS refining in the country so as to moderate domestic prices.”
Oyerinde noted that inflation rate in the country was already high at 22.22 per cent, as recorded in April 2023, and as such any increase in pump price of fuel will further accelerate it. He said this would distort and destabilise economic activities, shrink private sector business capitals and lower the real disposal income of the people.
He said, “No doubt, therefore, the economy would contract in terms of growth; business activities will face serious backlash; and aggregate consumption will fall due to inflationary pressure.”
Oyerinde further observed that the inaugural address of the president on fuel subsidy generated heated reaction, with fuel queues returning to the petrol stations and the prices of goods and services increasing astronomically.
MOMAN Urges Nigerians to Tighten Belt, Cut Consumption
Major Oil Marketers Association of Nigeria (MOMAN) advised Nigerians to adjust themselves to the new reality for the good of the country.
Executive Secretary of MOMAN, Mr. Clement Isong, made the call yesterday during a telephone chat with THISDAY. Isong explained that with the new petrol marketing regime, MOMAN members would be selling their products based on their cost of purchase.
He urged Nigerians to embrace the new petrol marketing regime and reduce their fuel consumption, saying the government should put in place appropriate palliatives to cushion the effect on the most vulnerable citizens.
The executive secretary also called on Nigerians to be empathetic at this time and try to help one another. He acknowledged that the situation might not be easy, but government’s action was necessary for the growth of the economy.
Isong said, “We don’t have any new supply as at today, but in the future, people will sell based on how they bought. Some people have credit from NNPC, so we don’t know whether NNPC will be selling to them at different prices. Some people don’t have credit with NNPC, if NNPC is selling to them on cash and carry, I don’t know, you don’t know.
“So, everybody will be selling his product depending on how he bought. I think we all know that this is necessary for the progress of our country, but there should be some palliatives for the most vulnerable of the society. But for a large number of Nigerians, we need to tighten our belts, we need to make the adjustments that are necessary.”
Isong further explained that other countries around Nigeria did not have petrol subsidy, despite the fact that they have crude oil like Nigeria, adding that those countries are not being “pampered” with subsidy.
Isong said, “Now that this is the situation that government cannot afford subsidy anymore, we will pay the same price just as our neighbours who have crude oil are paying the same price.
“And government needs to help those who need help, just like in those countries, so that in a short period we probably will grow, as the savings from the subsidy will be used to grow the economy.
“In a subsidy period, the country was dying. So if there is an opportunity for the government to do something for the most vulnerable of the society, the government should do it to manage the situation.
“But for the rest of us, we need to reduce our consumption, we need to manage ourselves better. It may not be easy, and we must all be empathetic and must be our brother’s keeper.”
Workers Insist on Status Quo, as FG, NLC Meeting is Deadlocked
A meeting called at the instance of the federal government between it and the leadership of both the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) on the issue of fuel subsidy removal was deadlock. The unions insisted on reversion to status quo on the petroleum subsidy issue.
The meeting took place at the conference room of the Chief of Staff in the State House, Abuja.
While federal government’s spokesperson, Dele Alake, told newsmen after the five-hour long meeting that it was a robust engagement, the president of NLC, Joe Ajaero, said labour remained on their demand for the restoration of subsidy.
According to Alake, “We had a very robust engagement. We cross-fertilised ideas, ideas flew from all sides and there is one thing that is remarkable even from the labour side and that is Nigeria. We are all looking at the progress and stability of Nigeria. That is what is paramount.
“We cannot go into any details now because talks are still on-going. We cannot finish everything at one sitting. So, we have adjourned now, we are continuing the talks at a later day very very shortly.
“The point is that talks are on-going and it’s always better for all sides to keep talking with a view to arriving at a very amicable resolution that will be in the longer term interest of all Nigerians. That is as much as we can say now.”
But Ajaero emphasised that no consensus was reached at the meeting, saying, “I wouldn’t know what was communicated to you as an outcome of the meeting. As far as labour is concerned, we didn’t have a consensus in this meeting.”
While insisting on a return to the status quo, the NLC president said, “That is one principle of negotiation. You don’t ask the partner to negotiate at gunpoint.”
On what NLC wanted specifically, Ajaero said, “The prayer of NLC is that we go back to status quo, negotiate, think of alternatives and all the effects and how to manage the effects this action is going to be on the people if it is an action that must take off.”
On whether the status quo meant restoration of subsidy, the NLC president stressed, “Well, the subsidy provision has been made up to the end of June and before then, conscious people, labour management, government to be able to think of what to happen at the end of June. You don’t start it before the time.”
Ajaero expressed concern that government could not respect the sanctity of the law that provided for fuel subsidy expenditure up till the end of June 2023. He said there was no country in the world that did not subsidise the living of their citizens, stressing also that, as long as Nigeria imports refined petroleum, the cost would be high.
President of TUC, Felix Usifo, said the unions would go and consult their members before deciding on the next meeting with government.
Usifo said, “So, it’s not about grandstanding but it’s about how do we protect the workforce. Clearly, we have stated in our meeting today, let status quo ante remain, while we go back and have conversations with our principal, because the workers are our principal, then we will reconvene for their discussion. But we hope that they will revert to status quo ante”.
The meeting was also attended by Permanent Secretary, Ministry of Labour and Employment, Kachallon Daju; Governor of Central Bank of Nigeria (CBN), Godwin Emefiele; Chief Executive Officer (CEO) of Nigerian National Petroleum Company Limited (NNPC), Mele Kyari, and former Edo State governor and ex-President of the NLC, Adams Oshiomhole, among others.
HURIWA Condemns Upward Review of Petrol Pump Prices
Prominent civil rights advocacy group, Human Rights Writers Association (HURIWA) condemned the petroleum price reviews as wicked, obnoxious, brutish, and absolutely unacceptable.
HURIWA called on Nigerians not to suffer and smile or die in silence but to take peaceful steps to demonstrate publicly against the wicked act of the new government.
HURIWA called on the new government to keep in mind that before it came on board, its predecessor, who was also from the same political party, had absolutely destroyed the national economy and pushed over 100 million households into absolutely poverty.
The rights group said the new president might have increased the pump prices of petrol to pay back millions of deprived and oppressed voters for rejecting the All Progressives Congress (APC) at the presidential poll.
It stated that the wicked manner the government had started by unleashing punishing scarcity of fuel and hiking the cost of fuel were a clear demonstration of the fact that the Independent National Electoral Commission (INEC) simply rigged the government into office.
HURIWA alleged that the government of President Bola Tinubu did not have the humane conscience to do pro-people policies since it had no popular mandate from the voters.
HURIWA recalled that following the announcement by Tinubu during his inauguration that the federal government would no longer pay subsidy on Premium Motor Spirit, NNPC effected an upward adjustment in the price of petrol across the country.
