The Nigeria Labour Congress has warned
the Federal Government against any further increase in the pump price of
petroleum products, especially Premium Motor Spirit, otherwise called
petrol.
The warning is coming as the retail
stations of the Nigerian Petroleum Corporations in the Federal Capital
Territory and its environs have increased the pump price of the PMS to
N145 from the initial N141.
Similarly, some private marketers of petroleum products are now selling petrol in their outlets at N150 per litre.
One of our correspondents reported that some filling stations in Lagos and Ogun states had refrained from selling the product.
For instance, the Oando filling stations
at Alapere and Berger as well as the Mobil filling station opposite the
Magodo Estate gate did not dispense the product to members of the
public since Friday.
Similarly, the Ascon and NNPC stations
between Arepo and Magboro, off the Lagos-Ibadan Expressway, Ogun State,
did not sell the product on Sunday, raising fears of another round of
fuel scarcity.
The General Secretary, NLC, Dr. Peter
Ozo-Eson, told one of our correspondents on the telephone on Sunday that
it would be insensitive on the part of the government to increase fuel
price in view of the current hardship in the land.
Ozo-Eson added, “Well, we have been
clear on this matter from the beginning that once you submit the
determination of the prices of the products to the market, the way they
are doing it in an import regime, that will devalue the naira.
Therefore, they will come back and tell you the prices are not
realistic. We knew that from the beginning and we said so.
“The fact of the matter is that any
attempt to increase the price of fuel now, given the level of hardship
and the level of suffering Nigerians are going through, will be regarded
as extremely insensitive.”
The NLC secretary pointed out that while
the NLC was opposed to any further adjustment in the price of fuel, it
was up to Nigerians to also decide how to live with such an adjustment.
He stated, “We do hope that Nigerians
will realise that this has no end, and what the government is doing will
continue to impose extreme hardship on them, and they need to tell the
government that enough is enough.
“Other than that, we oppose any
adjustment in the pump price. If the government goes ahead to do it, it
will indicate what we hinted right from the beginning that the policy
adopted was wrong, and it remains wrong.
“It is up to Nigerians to oppose it. We
provided the necessary leadership based on our understanding of the
issues and the reality is coming home to roost and it is never too late.
Nigerians will have to take the decision as to how they have to live
with it.”
While the Petroleum Products Pricing
Regulatory Agency refused to confirm or deny any plan to adjust the
price of petrol, one of our correspondents quoted officials of marketing
firms as blaming the increase in the pump price on the high cost of the
commodity at depots.
The pricing template of the PPPRA for
PMS was last updated on May 24, 2016 and it had the pump price at a band
of N135 to N145 per litre.
When asked to comment on whether the
PPPRA was on the verge of hiking petrol price, the agency’s Acting
Executive Secretary, Mrs. Sotonye Iyoyo, stated that forex had remained a
challenge and noted that the agency works with the prevalent market
fundamentals when determining or fixing petrol price.
Iyoyo said “Today as we know there is
scarcity of foreign exchange and when we want to fix prices we look at
the market fundamentals. We don’t just fix prices without looking
critically at the fundamentals of the market.
“There is a price band that is between
N135 and N145. The maximum is N145, and so anyone selling at that price
is still within the price band.”
A source told one of our correspondents
that marketers had stopped importing petrol into the country because
the landing cost had gone beyond what the PPPRA stated in the template
for the product and the government, through the NNPC, had failed to meet
its promise of supplying the importers’ forex needs.
The source explained that due to the
crisis in the Niger Delta, the NNPC was finding it difficult to generate
enough forex from crude sale as the nation was losing an average of one
million barrels per day to the bombing of crude pipelines and vandalism
of critical infrastructure.
According to him, the marketers have
resorted to getting the product from the Pipelines and Product Marketing
Company at around N132 per litre, whereas the actual landing cost of
the product is between N136 and N137 per litre, adding that the NNPC was
currently subsidising the cost of petrol.
However, the Minister of State for
Petroleum Resources, Dr. Ibe Kachikwu, has faulted the increase in the
pump price of petrol by the NNPC mega stations and other private filling
stations.
The minister, who said the price
increase was done without his knowledge, said he would investigate the
development, adding that he would also meet with oil marketers to
discuss issues concerning fuel price.
Speaking on the sidelines of an award
ceremony and dinner organised by the PPPRA branch of the Petroleum and
Natural Gas Senior Staff Association of Nigeria on Saturday night,
Kachikwu said the instability in the foreign exchange market had been a
challenge to the oil importation business.
When asked if the N4 increase in the
pump price of petrol by the NNPC stations was a sign of an imminent hike
in the rate, the minister said, “First, I am not aware that the NNPC
has increased the price. I need to look into that; it is a bit of
surprise for me because there are processes in doing this. If they have
done that, it means they are doing it wrongly. Let me find out what the
facts are.
“Having said that, the reality is that
what we did at the point when we did some liberalisation was to enable
the free market to float the price. Obviously, as you look at foreign
exchange differentiation and all that, it will impact (on the pump
price). The worst thing you can do is to go back to an era where we
basically will be fixing prices.
“What we ought to be doing is to watch
the prices, making sure that they are not taking advantage of the common
man, making sure that the template is respected. One of the things I
think we had hoped to do, which we should still do before we embark on
any price increase, is to work on that template.”
Kachikwu stated that despite the harsh
reality with respect to forex availability, the government was ready to
tweak some of the components making up the price of petrol in order to
forestall any increase in price.
He said, “There are still areas that are
within the government’s control like payments to the Ministry of
Transportation and the rest, and payments to the Nigerian Ports
Authority that are foreign-currency denominated. We are working on the
possibility of being able to shift that out so that you still can
modulate the prices within where it is right now. But I will hold a
conversation with the industry and see how it is going.
“However, what is key is that I never
want to see fuel queues back. Those who are investing must be able to
predict the pricing methodologies, the pricing consequences and the
actions to be able to justify their investments. At the end of the day, I
think the PPPRA is the one that has the authority to say it is time the
template does justify some level of movement, otherwise you have a
crisis of individual decisions on pricing.”
