As NNPC Exonerates New GMD, Kyari On Fuel Price Hike, PDP Tackles Buhari, APC

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Petrol hike
Petrol hike

By Akanimo Sampson

The Nigerian National Petroleum Corporation (NNPC) has cautioned petroleum products marketers against selling Premium Motor Spirit, popularly known as petrol above N145 per litre.  The state oil corporation says there is no plan to increase the pump price of petrol in the country.

The state oil corporation advised motorists and other petroleum products consumers to disregard trending rumour of a planned hike in the pump price of petrol.

But on Wednesday, Mele Kyari, the new Group Managing Director of NNPC, had at the National Assembly, Abuja, said that Nigeria was the only country in West Africa with the cheapest pump price of petrol, an indication that the corporate might hike the price. The corporation has however, claimed that the statement did not suggest any plan to increase the price of the white product.

NNPC Group General Manager, Ndu Ughamadu, Group Public Affairs Division, clarified that what Kyari stated during his engagement with the Senate President, Ahmed Lawan, at the National Assembly was that the price of petrol was abysmally low in Nigeria compared to what obtained in neighbouring West African countries.

Ughamadu noted that Kyari had observed at the event that the huge disparity in the pump price of petrol between Nigeria on the one hand and her neighbouring country on the other hand tended to encourage cross-border leakages, as he sought the support of the leadership of the National Assembly to curb the malaise of smuggling.

While advising Nigerians from all walks of life to disregard the insinuation of a plan hike in the price of petrol by NNPC, claiming statutorily that NNPC is not even in a position to regulate the price of petroleum products, he added that as directed by relevant agencies of the government, the pump Price of petrol remains N145 per litre.

Apparently not persuaded, the opposition Peoples Democratic Party (PDP) has advised the Muhammadu Buhari administration and the ruling All Progressives Congress (APC) to perish any plan of raising the pump price of fuel, claiming that its position is predicated on the party’s commitment to the welfare of the citizenry that any increase in fuel price will result

PDP argues that such a development will trigger an upsurge in cost of goods and services and worsen the biting hardship being faced by Nigerians, who are already overburdened by the APC in the last four years.

PDP Spokesman, Kola Ologbondiyan, said in a statement that they firmly hold the view that, at a time like this, rather than musing an increase in the price of such an essential commodity, a responsive leadership ought to be engaging stakeholders and seeking ways to achieve a reduction in the interest of the people.

“Our party insists that the price comparison being contemplated by the APC-controlled NNPC to warrant an increase, is untenable and further demonstrates that the APC is a party of selfish, unfeeling and insensitive individuals, who relish in inflicting pain and anguish on Nigerians for their selfish desires.

“Moreover, in arguing that petrol price is cheap in Nigeria without also comparing our market and production variables as well as social and economic infrastructure, with those obtainable in other countries, the APC-controlled NNPC is trying to play on the intelligence of Nigerians to pave way for further fleecing of our citizens.

“Such anti-people position can only come from leaders who do not have the mandate of the people and as such think that they are not answerable or accountable to the citizenry. This is the same APC, which, in 2015, promised to reduce fuel pump price, only for it to jerk it up from N87 per liter, stabilized by the PDP, to an exorbitant N145, from which it now seeks a further increase.

“The APC-led Federal Government has no justification whatsoever to contemplate any increase in pump price of fuel, when President Buhari has failed to recover the N9 trillion ($25 billion) oil money stolen under his watch, through sleazy contracts, as detailed in the leaked NNPC memo.

“President Buhari had also failed to recover the N1.1 trillion worth of crude oil allegedly stolen, using 18 unregistered companies, reportedly linked to APC interests. It is therefore unacceptable that rather than recovering the over N10 trillion stolen oil money and channeling same to our domestic energy needs, the APC-led Federal Government is seeking to shift the burden of the humongous corruption in the NNPC, as confirmed by Kyari, on our already deprived and impoverished compatriots.

“It is saddening that at a time Nigerians should have been enjoying the benefits of Atiku Abubakar’s economic recovery plan, they are still being faced with apprehensions of more economic hardship under the hypocritical and unfeeling APC,’’ PDP said.

The fuel price hike rumour is coming barely a week after this news portal had reported that there were intense diplomatic pressure from all fronts for President Buhari to discontinue with the the subsidy regime that has allegedly opened Nigeria’s public finance to huge corruption and illegal exportation of petroleum products to neighboring countries.

It is already being estimated that the country may have spent some N10 trillion in the provision of pump price subsidy on imported petroleum products from 2006 to 2018.

A research report by BudgIT, a public finance focused civic organisation, said this amount came from the price shocks in the international energy market as well as the exchange volatility.

In a report titled, Nigeria’s Petrol Subsidy Regime: Dilemma of the World’s Most Populous Black Nation, the group claimed that Nigeria currently imports an average of 91 percent of her daily petrol needs, thus disproportionately exposing local petrol prices to price shocks from international factors of production and exchange rate volatility.

According to them, “There is a near perfectly inverse relationship between the fall in the value of Naira and the rise in the cost of imported petrol. That is, when next the Naira is devalued, Nigeria’s subsidy bill can be expected to jump.

The continuation of petrol price regulation perpetuates safety nests for exceptional forms of corruption within the country’s subsidy regime. Import subsidy creates petrol price arbitrage – the differential between the regulated price in Nigeria and the high petrol prices in neighbouring countries – which is big enough to incentivise smuggling of subsidised products to neighbouring border towns.’’

The Managing Director of the International Monetary Fund (IMF), Christine Lagarde, has been calling on the Federal Government to remove fuel subsidy, saying it is the right thing to do.

She said with the low revenue mobilisation that existed in Nigeria in terms of tax to Gross Domestic Product, it was important for the country to remove fuel subsidy, arguing that by so doing, the country will be able to move funds into improving health, education, and infrastructure.

The government has however, given conditions for the removal of subsidy on premium motor spirit, also known as petrol.The conditions include: provision of alternative cushioning measures mutually agreed between stakeholders to protect the economically vulnerable members of the population.

Immediate past Finance Minister, Zainab Ahmed, who said so last April, pointed out that Abuja was yet to arrive at such measures, adding, “There is no immediate plan to remove fuel subsidy, contrary to speculations that have led to the emergence of fuel queues in some parts of the country.’’

At the moment, the United States is joining the IMF to press for a fuel price hike in the country. The US Ambassador to Nigeria, Stuart Symington, wants the government to remove fuel subsidy as part of measures to raise fund for the development of critical infrastructures.

Symington who was speaking during America’s 243rd Independence anniversary celebration held in Lagos, the commercial capital of Nigeria, also suggested that the government should educate the girl child and empower its citizens to address the nation’s socio-economic problems.