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At last, President Goodluck Jonathan has ordered the removal of fuel subsidy effective from yesterday. It could be regarded as a surprise new year gift to Nigerians, in spite of repeated counsel by organised labour, civil society groups and elder statesmen that it is ill-timed.
The bad piece of news was broken yesterday in a statement issued by the Petroleum Products Pricing Regulatory Agency (PPPRA) and signed by it executive secretary, Mr. Reginald Stanley.
The statement reads in part: “Following extensive consultation with stakeholders across the nation, the PPPRA wishes to inform all stakeholders of the commencement of formal removal of subsidy on Premium Motor Spirit (PMS), in accordance with the powers conferred on the agency by the law establishing it, in compliance with Section 7 of PPPRA Act, 2004.
“By this announcement, the downstream sub-sector of the petroleum industry is hereby deregulated for PMS.
Service providers in the sector are now to procure products and sell same in accordance with the indicative benchmark price to be published forthnightly and posted on the PPPRA website.”
According to the benchmark price stated on the PPPRA’s website as at Thursday, December 29, 2011, a litre of fuel is expected to cost N143, but oil marketers have said that there cannot be a uniform selling price to the product.
Informing oil marketers to note that “no one would be paid subsidy on PMS discharges after 1st January 2012,” the PPPRA assured consumers of adequate supply of quality products at prices that are competitive and non-exploitative, saying that, “there is no need for anyone to engage in panic buying or product hoarding”.
Stanley added that the PPPRA in conjunction with the Department of Petroleum Resources (DPR) would ensure that consumers are not taken advantage of in any form or way.
He said: “The DPR will ensure that the interest of the consumers in terms of quality of products is guaranteed at all times and in line with international best practice. In the coming weeks, the PPPRA will engage stakeholders in further consultation to ensure the continuation of this exercise in a hitch-free manner.”
But reacting to the development, the executive secretary of the Major Oil Marketers Association of Nigeria (MOMAN), Mr. Femi Olawore, said the marketers will definitely not have a uniform selling price of the product.
Olawore, who spoke to one of our correspondents on the phone, said: “There won’t be a uniform price. I cannot say the price is going to be X. If it is X for Marketer A, it will be X+ for Marketer B.”
Asked if the marketers would sell within the PPPRA’s benchmark, Olawore said: “I cannot say much now because I am driving and I have not even seen what you are talking about, but what I can tell you is that there cannot be a uniform price of the product.”
When contacted, the group general manager, group public affairs division of the NNPC, Dr. Levi Ajuonuma, said the prices cannot be uniform. “Everybody cannot sell at the same price; that’s the beauty of deregulation. It will bring about price competition and eventually force down the price,” he stated.
On the level of preparedness of the NNPC to become a player in a deregulated environment, Ajuonuma said, “we are very prepared. Already the Pipelines and Products Marketing Company (PPMC) has a large stock of supply and, if you go round, you will see that products are available everywhere.“
On how government intends to deal with the possibility of the formation of cartels by oil marketers, which is a common feature in a deregulated environment, the NNPC spokesman assured that the development had been taken care of.
Meanwhile, the organised labour in the country has called on Nigerians to wake up from slumber, roll up their sleeves and prepare for a long battle ahead.
The president of the Nigeria Labour Congress, NLC, Comrade Abdulwaheed Omar, who stated this in a statement last night, said the presidency deceived Nigerians when the president stated that no final decision had been taken as government was still consulting. “But now the subsidy has been removed. That was the president’s new year gift to Nigerians,” he said. “We call on Nigerians to roll up their sleeves for a tough time to strongly resist and condemn the fuel subsidy removal policy that will inflict unnecessary suffering and punishment on Nigerians by the President Goodluck Ebele Jonathan-led federal government.
“Unless the government changes its mindset to adopt patriotic and pro-people policies and programmes, the nation’s citizenry are in for a tough 2012.
“We call on Nigerians to be ready for the mass struggle because we are quite confident that a united people that takes its destiny into its hands and asserts its sovereignty can overcome all obstacles and reclaim their country.”
Omar, who argued that the NLC has fundamental disagreements with the policies and philosophy of the Jonathan administration, said: “We do not subscribe to the methods of a government that takes a decision like the withdrawal of fuel subsidy before deciding to consult the citizenry.
“We do not agree with the tactics of a government that is not inclined to, or refuses to implement agreements it freely enters into with its people and their institutions.”
The labour leader added: “The NLC holds that there is something fundamentally wrong in government allowing the World Bank and International Monetary Fund (IMF) agents to run the economy and co-ordinate ministers, as the Congress believes that if the dictates of the Breton Woods institutions run the entire economy and determine the policy direction of government, there is little initiative left to those elected to govern the country in the interest of Nigerians.”
Labour further said that it would occupy the major streets in Lagos by today to protest against the subsidy removal.
Also, the president-general of the Trade Union Congress (TUC), Comrade Peter Esele, has argued that while government claims to be consulting on the fuel subsidy removal, its commissioners of police in a number of states are boasting that they are armed and battle-ready to smash Nigerians who may publicly protest their feelings against the removal. He also called on Nigerians to be battle ready to take their destiny in their hands, saying that “since the fuel subsidy removal is a war foretold, the Nigerian people have the fundamental right to resist it.”
He added: “Organised labour in the country is working with other mass organizations including professional bodies, pro-people civil society organizations, market associations and other sections of the populace to organise mass protest, including rallies, strikes to resist the subsidy removal.”
When contacted on the matter, the minister of information, Mr. Labaran Maku, stated that the federal government has taken time to consult widely before effecting the subsidy withdrawal, assuring that it is in the overall interest of the country. He said: “The decision to commence subsidy withdrawal comes after government ‘s evaluation of its wide-ranging consultation on this matter.”
Maku also explained that government is not unmindful of the suffering Nigerians may be subjected to as a result of the new policy, but that “that is only at the beginning, as before long the benefits will by far outweigh the drawbacks.” He cited deregulation in such critical areas as broadcasting and telecommunication as examples, which he said Nigerians objected to at the beginning, but are better for it now.
Asked whether the government has considered the subsisting security situation in the country before embarking on this course of action, the information minister responded that poverty and unemployment are some of the major problems causing all the unrest, including the Boko Haram menace, and that proceeds from subsidy removal are going to be channelled towards making life better for all Nigerians, especially the downtrodden. This, he said, is going to be pursued through a “carefully designed programme” called Subsidy Reinvestment and Empowerment Programme.
Meanwhile, the NNPC mega station in the Central Business District of Abuja has started selling petrol at N138 per litre, about N5.00 less than the PPPRA-recommended price of N143. The development also led to long queues of vehicles as motorists were eagerly buying at the price.
When LEADERSHIP ‘s attempts to speak to the station’s manager were unsuccessful but a pump attendant, Labaran Ahmed, said the pump price of petrol was changed to N138 at about 5 pm as directed by the station’s management.
While most vehicle owners declined to speak with LEADERSHIP on the new pump price of petrol, a taxi driver who chose to speak, Ezeikel Ogbonaya, said he had no choice but to charge his customers appropriately.
Ogbonaya said, “I used to fill my tank with N3,000 but at this new price of N138 per litre, I will spend N7,000 to fill up my tank.”
NNPC’s pump price for petrol is usually a little less than other privately-owned filling stations. But the privately-owned stations that LEADERSHIP visited late last night had closed for the day instead of immediately adjusting their pump price.
LEADERSHIP also observed that a few filling stations within Wuse 2 and Maitama visited as at 4.30 pm had all closed shop. When LEADERSHIP visited the NNPC station on Kashim Ibrahim Way, Wuse 2 at about 3.20 pm, it was still selling petrol at N65 per litre but, just over an hour later, the station had shut down.
Of the two AP stations that are located on Aguiyi Ironsi Road, opposite Transcorp Hilton Hotel in Maitama, only one remained open when LEADERSHIP visited at about 5pm.
According to officials of the two stations, they have separate and independent management but both were unaware that the fuel subsidy had been removed by the federal government.
While the first AP was shut, there was a long queue of cars waiting to buy petrol at the second station. The senior staff member in charge, who refused to give his name, however, said he was not aware that fuel subsidy had been removed.
He said that he talked to the station’s manager an hour earlier and he had been instructed to keep selling.
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