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Subsidy removal: Petrol price hits N700/litre as FG says no going back

Forty-eight hours after the pronouncement by President Bola Ahmed Tinubu that the fuel subsidy is gone, queues across the country have resurfaced even as many…

Forty-eight hours after the pronouncement by President Bola Ahmed Tinubu that the fuel subsidy is gone, queues across the country have resurfaced even as many filling stations are under lock and key. 

This is just as the price of petrol per litre ballooned to over N700 in some parts of the country as black marketers take over the market. 

Tinubu had on Monday affirmed the decision of the immediate past administration to remove fuel subsidy, saying:  “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime, which has increasingly favoured the rich more than the poor.” 

The statement, however, triggered instantaneous scarcity across the country with many filling stations shutting down their premises to motorists. 

Situation in states 

In Lagos, many filling stations were shut Tuesday while the few that were dispensing had long queues of motorists. 

The development has resulted in a hike in transport cost as motorists have almost doubled their fares. 

One resident complained of spending N1, 500 from Iyana Ipaja to Arepo for a trip that should not cost more than N700. 

Filling stations in some parts of Lagos metropolis now sell at between N500 and N600 along the Mile 2 – Badagry expressway. 

The few filling stations belonging to the NNPC that sold their product for N180 per litre on Tuesday morning stopped selling around 9am. 

For some major marketers who still had fuel, the prices remained N195 per litre even though there was a long queue at such filling stations. 

Stations locked in Abuja 

Most petrol stations in Abuja Tuesday didn’t sell premium motor spirit (PMS), Daily Trust reports. 

Our correspondent, who moved around the city, observed in Kubwa, Kado and Jabi that many filling stations had closed down. Queues were seen in the filling stations despite not dispensing. 

Stephen Ojunta, a motorist wearing a long face, said: “Today, I have been to about six filling stations but I did not get fuel to buy. They are not even selling. I went to Shafa in Dutse, MRS in Dutse express, and Mainland also in Dutse. Filling stations in Kado and Jahi were also not selling. 

In Yenagoa, Bayelsa State, the price skyrocketed to N700 from N230 as black marketers took over the supply of the products in the state capital. 

A trader in Abeokuta, Ogun State, Mrs Azeezat Adeyemi told Daily Trust that she had left her car at home and took cabs following the fuel crisis. 

Residents of Ilorin in Kwara State on Tuesday lamented the sudden decision of some oil marketers to shut their fuel stations. 

One of them, Daniel, said they started experiencing queues in their area along Odota on Monday when some filling stations abruptly shut down for business. 

In Bauchi, Sani Umar faulted the announcement of subsidy removal by President Tinubu without taking any tangible step to cushion the effects, particularly the attitude of petrol stations. 

Subsidy will get rid of Nigeria – Shettima 

Vice President Kashim Shettima said Nigeria must get rid of fuel subsidy before it deals a deadly blow to the country. 

He stated this Tuesday while fielding questions from State House reporters after resuming office at the Presidential Villa, Abuja. 

The vice president said the new administration had anticipated stiff opposition from people benefitting from the subsidy scam, adding that the issue would be frontally addressed. 

Shettima said: “The president has already made pronouncements on the issue of the fuel subsidy. The truth of the matter is that it is either we get rid of subsidy or the fuel subsidy gets rid of the Nigerian nation. 

“In 2022, we spent $10billion subsidising the ostentatious lifestyle of the upper class of the society because you and I benefit 90% from the oil subsidy. The poor 40% of Nigerians benefit very little. And we know the consequences of unveiling a masquerade.

“We will get fierce opposition from those benefiting from the oil subsidy scam. But where there is a will, there is a way.” 

FG owes NNPCL N2.8trn fuel subsidy payment deficit – Kyari 

The federal government owes Nigerian National Petroleum Company Limited (NNPCL) to the tune of N2.8 trillion in fuel subsidy payment deficit, the Group Chief Executive Officer (GCEO) of NNPCL, Mele Kyari, disclosed this Tuesday while speaking to journalists at the Presidential Villa, Abuja, after a meeting with President Bola Tinubu in his office. 

He said the heavy subsidy burden had made it impossible for the NNPCL to have funds to channel into its core businesses. 

He said: “Since the provision of the N6 trillion in 2022, and N3.7 trillion in 2023, we have not received any payment whatsoever from the federation. 

“That means they (federal government) are unable to pay and we’ve continued to support this subsidy from the cash flow of the NNPC. That is, when we net off our fiscal obligations of taxes and royalty, there’s still a balance that we’re funding from our cash flow and that has become very difficult and affecting our other operations. 

“Today, we are waiting for them to settle up to N2.8 trillion of NNPC’s cash flow from the subsidy regime and we can’t continue to build this,” he explained. 

Reps, NNPCL, major marketer’s back subsidy removal 

The House of Representatives has commended President Tinubu for taking a bold step to stop fuel subsidies during his inauguration on May 29. 

This followed the adoption of a motion on matters of urgent public importance by Jimoh Abdulraheem Olajide at the plenary on Tuesday.

 The lawmaker reminded that there is no provision for fuel subsidy in the 2023 Appropriation Act, adding that the current 9th Assembly and the past administration had given it legal backing. 

Similarly, the Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Marketers Association of Nigeria (DAPPMAN), have thrown their weight behind the removal of subsidy. 

Both bodies in a joint statement issued on Tuesday, applauded the pronouncement by President Tinubu on the phase-out of the petrol subsidy regime. 

The statement said the bodies appreciate the clarity of policy from the Tinubu administration, which it said is a direction that signals a courageous and pragmatic shift in the nation’s economic trajectory.  

It, however, urged marketers to maintain reasonable pump prices of petrol and also advised members of the public to avoid panic buying in order not to create scarcity. 

The bodies said they anticipate minimal changes regarding distribution costs. 

No need for panic – NMDPRA 

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has urged Nigerians not to panic over the announcement of the removal of petrol subsidy. 

In a reaction to the development, NMDPRA General Manager, Corporate Communications, Kimchi Apollo said the Authority was working closely with NNPC Limited and other key stakeholders to guarantee a smooth transition, avoid any disruptions in supply as well as ensure that consumers were not short-changed in any form.  

LP, TUC kick, say pronouncement ill-timed 

The Labour Party (LP) has condemned what it described as the presidential fiat and unilateral decision by President Tinubu, whom it said without any form of consultation with stakeholders, particularly the labour unions removed the subsidy on petroleum, instantly pushing Nigerians further into hardship. 

The Acting National Publicity Secretary of LP, Obiora Ifoh, said less than 24 hours after President Tinubu took over the reins of power, Nigerians woke up to see the pump price of petrol jacking  up to between N600 and N750 per litre in the black market. 

“As expected, commercial transporters have hiked their trip fares across the country in response to the developments. While product hawkers are once more the king of the jungle. What a way to announce one’s emergence as the sheriff in town. 

President Tinubu’s first executive proclamation was such that it is purposed to inflict pains on Nigerians.” 

He called on the government to quickly re-evaluate the policy and come up with a more practical plan to remove the subsidy in such a way as not to jeopardise the peace of the nation. 

Social Democratic Party (SDP) presidential candidate in the last election, Prince Adewole Adebayo has described the approach as “untidy and ill-timed”. 

He advised Nigerians to be united so that they could hold the elite more accountable. 

Saboteurs will be dealt with – Sanwo-Olu 

Kwara State governor and Chairman of Nigeria’s Governors’ Forum (NGF), AbdulRahman AbdulRazaq has warned against imposing needless hardship on the citizens through the creation of artificial fuel scarcity in his state and beyond. 

On his part, Lagos State governor, Babajide Sanwo-Olu has said the federal government will deal with marketers taking undue advantage of Nigerians by hiking fuel prices. 

Sanwo-Olu, who spoke yesterday when he paid a surprise working visit to civil servants at the secretariat in Alausa, Ikeja, described the sudden hike in petrol price and the attendant queues as unfair. 

“I think it’s unfair of our major marketers to seize opportunities in areas when not needed. We all need to be sincere in this country if we really want to get things done. Let us know that we might need to belt up a little bit, but we really need it so that we can have a better life in the future.” 

There’s need for context – Expert 

Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers (PwC) has said that the Tinubu administration and relevant agencies needed to provide context to the fuel subsidy removal declaration.

Speaking on Channels Television, Oyedele said that during the campaign season, President Tinubu was very clear on his stance as regards the fuel subsidy removal. 

According to Oyedele, the president’s declaration was proof of the decision he had already made to remove the fuel subsidy. 

Oyedele said he does not believe the Tinubu administration will literally remove the petrol subsidy immediately, as the full implementation will probably take a couple of weeks or more. 

He said that what the administration did not want was to escalate the situation before removing the subsidy. 

 

Contributions by: Sunday M. Ogwu, Balarabe Alkassim, Abbas Jimoh, Dalhatu Liman, Baba Martins, Muideen Olaniyi, Seun Adeuyi ( Abuja),  Abiodun Alade, Abdullateef Aliyu, Eugene Agha (Lagos), Bassey Willie (Yenagoa), Raphael Ogbonnaiye (Ado-Ekiti),  Iniabasi Umo (Uyo),  Maryam Ahmadu-Suka (Kaduna),  Peter Moses (Abeokuta),  Usman A. Bello (Benin), Mumini Abdulkareem (Ilorin), Victor Edozie (Port Harcourt),  Hope A. Emmanuel (Makurdi), Hassan Ibrahim (Bauchi), Salim U. Ibrahim (Kano), Adenike Kaffi  (Ibadan), Habibu Idris Gimba (Damaturu), Tosin Tope (Akure), Tijjani Ibrahim (Katsina), Haruna G. Yaya (Gombe) & Ali R. Ali (Dutse).

 

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