Nigerians have reacted to plans for further increase in the pump price of petrol as crude oil price climbs above $60 per barrel.
Currently, petrol sells for between N159 and N162 across filling stations nationwide with the price band set when crude oil sold for about $40 per barrel in November 2020.
However, the Minister of State, Petroleum Resources, Chief Timipre Sylva, at the launch of the Nigerian Upstream Cost Optimisation Programme (NUCOP) in Abuja on Tuesday said Nigerians should brace up for higher fuel price.
The NUCOP launch was to find ways of reducing the cost of crude oil production and processing, officials said.
Sylva also said with no provision of subsidy in the 2021 budget, the Nigerian National Petroleum Corporation (NNPC) couldn’t continue to bear the cost of under-recovery.
“Since we are optimizing everything, NNPC needs to also think about the optimization of product cost because as we all know oil prices are where they are today, $60. As desirable as this is, this has serious consequences as well on product prices.
“As a country, let us take the benefits of the higher crude oil prices and I hope we will also be ready to take a little pain on the side of higher product prices,” he said.
“We need to optimise our unit cost of production in order to sustain our way of doing business.”
The Group Managing Director (GMD) of NNPC, Mallam Mele Kolo Kyari, said the corporation was leveraging working to reduce oil production cost.
“It is in our informed interest to optimise on our cost of production. The realities of energy transition and investor choices are very much clear to us. There is nowhere in this world where a less cost-efficient operator can survive today.”
Petrol freight rate may reach N9.11/litre
Meanwhile, the federal government has commenced discussions with representatives of the organized labour on how to raise the freight rate of the Premium Motor Spirit (PMS) petrol from N7.51 per litre to N9.11 per litre.
The plan will amount to 21.30 per cent hike in freight that is a Petroleum Products Pricing Regulatory Agency (PPPRA) component of the total cost of the petrol.
In a virtual message at the 21st Annual General Meeting (AGM) of the National Association of Road Transport Owners (NARTO) held recently, the Executive Secretary of the Petroleum Equalisation (Management) Board (PEF), Alhaji Ahmed Bobboi said the agency was waiting for the Federal Government approval before it would begin the implementation of the new freight rate of N9.11 per litre.
NNPC boss Kyari also confirmed this at the event noting that it would come after deliberations with the organised labour are concluded.
The NARTO National President, Alhaji Yusuf Lawal Othman urged the government to implement the new N9.11 freight rate to enable the transport owners improve their services and increase the wages of their staff including the truck drivers.
Reactions trail planned fuel price hike
More reactions have trailed the announced as some Abuja residents lamented the impending increase in price of petrol saying it would compound the already high cost of living in the country.
The Chief Executive Officer of an Abuja-based clothing outlet, Style World Limited, Mr Peter Effiong, said for every time the Federal Government adjusted the price of petrol upwards, traders also increased prices of their commodities due to rise in transportation and production cost.
“If they increase fuel price, we are the one to continue suffering. Everything will increase in price,” Effiong said.
A civil servant in Abuja, Usman Dankaka, said many civil servants will be affected by further increase in petrol price.
In Lagos, Mrs Kehinde Oni, a Lagos-based hair stylist, rejected the proposed move to further jerk up the price of petroleum, saying it would further deepen the woes of operators.
“We also heard about the plan that petrol might increase again but this is not going to be funny. What this means that we would be spending more money fuelling my generator. Things are already hard. Why are we compounding things for us?”
A frozen food seller at Opebi area of Lagos, Mrs Michael Abiodun said she already spends N4,500 daily to keep her products refrigerated, lamenting that residents and business owners have been experiencing blackouts in the area for weeks.
A petroleum marketer, Mr Abdulrasheed Olapade said independent marketers have incurred heavy losses in recent times over the level of speculations in the system.
“We had two increments recently with no profit margins to marketers. We could be buying at N5 today and the following day the depot would say it is now N10 billion and that has been the case,” he added.
Commenting, the Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf said there was a need for the deregulation policy to avoid bringing back the problem of petroleum subsidy will resurface with all the challenges of corruption, diversion of petroleum products to neighbouring countries and pressure on government finances.
“The situation presents a very delicate balance between economic and commercial considerations on one hand and the social and welfare considerations on the other hand. The challenge before policy makers is to locate the balance.”
The solution, according to the LCCI boss, lies on how fast Nigeria is able to ensure a domestic refining of petroleum products, saying, this is a very critical factor in ensuring the sustainability of the deregulation policy.
However, the Independent Petroleum Marketers Association of Nigeria (IPMAN) said it any increase in the fuel pump price. An executive member of the association said, “Our members have been suffering over unavailability of forex to source for products abroad. The increase will mean that some of us would get some profits.”
The national president of IPMAN, Chinedu Okonkwo neither responded to messages sent by one of our reporters nor answered the several phone calls.
Labour kicks over planned moves
The Organised Labour has criticised the federal government over its fresh move to increase petrol pump price following the rise of crude oil price above $60 per barrel in the international market.
Speaking via telephone with Daily Trust, the President of the Trade Union Congress (TUC), Quadri Olaleye, wondered why the government is always in rush to increase fuel price any time there is a rise of crude oil at the international market.
“Why is it that the government is always in a hurry to implement an increase any time crude oil price rises in the international market? Last time when the price went down in the market, Nigerian government didn’t reduce the price of PMS.
“Besides, we are still expecting the report of the technical committee set up last time by February 22. Why the rush?”
The union leader said the organised labour would not disclose its strategies on how to fight the government this time around if it tries to inflict more pains on Nigerians the way it had been doing through some of its anti-masses policies including increment of price of fuel.
Several calls to the mobile phones of President and Secretary of Nigeria Labour Congress (NLC), Ayuba Wabba and Emmanuel Ugboaja respectively, were not answered neither did they respond to a text message from our correspondent.
By Zakariyya Adaramola, Francis A. Iloani, Idowu Isamotu (Abuja), Sunday M. Ogwu, Christiana T. Alabi & Abdullateef Aliyu (Lagos)
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