Angst As Marketers Hike Fuel Price To N162/litre

There is palpable discontent in the land as Nigerians both collectively and individually have expressed dismay over the hike in the pump price for premium motor spirit (PMS) also known as petrol from N148 per litre to N161 per litre by oil marketers.

The downstream sector of the Nigeria petroleum industry was thrown into confusion yesterday following federal government’s announcement of two different prices of fuel for the month of September.

Earlier in the day, petroleum products marketers in the Lagos axis confirmed to journalists that the government had approved a pump price of N151.56 per litre for the month of September as against the N148.50 per litre approved for petroleum product marketers in the month of August.

The revelation was accompanied with evidence of a memo signed by one D. O. Abalaka of the Pipelines and Product Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

The memo titled, Re: Product Pricing, dated September 2, 2020 and sent to petroleum product marketers contained a new pump price of N151.56 per litre.

Part of the statement reads: “Please be informed that a new product price adjustment has been effected on our payment platform.

“To this end, the price of Premium Motor Spirit (PMS) is now one hundred and fifty-one naira, fifty-six kobo (N151.56k) per litre.

“This takes effect from September 2, 2020.”

But in another development, a similar memo signed by Onya Schola of PPMC (PPMC/MOD/SALES/346) dated September 2, 2020, which pegged the ex-depot price of the product at N147.67 per litre, was said to have been issued by Ibadan branch of the agency and sent to the marketers in that region.

Experts’ analysis of the ex-depot price fixed at N147.67 say the implication is that the pump price is now N151.56 per litre.

Consequently, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has directed its members in the South West region of the country to begin sales of petrol at N162 per litre.

The southwest zonal chairman of IPMAN, Alhaji ‘Dele Tajudeen, in a telephone chat with journalists in Abeokuta, the Ogun State capital, said his members would be left with no other option than to dispense the product at a price of N162.

Tajudeen said, the directive followed the increase in deport loading price of the product by the federal government, which placed a new price regime of the product at N151. 56.

He explained that since the federal government has decided to put the price of the product at N151. 56, IPMAN has no option than to sell at N162 per litre to be able to meet up with the overhead cost.

Tajudeen said IPMAN members would have to make provision for the cost of diesel to run generators that will power the dispensing machines, pay the cost of transporting the fuel from the depot to their respective filling stations and also settle their statutory levies with the appropriate regulatory agencies.

He noted that by the time the marketers finish paying all the levies, the cost of discharging fuel at the petroleum filling stations would have shored up to N160, hence dispensing the product at N162 will enable IPMAN members pay their staff bills and the stations’ gains.

Meanwhile, the agency saddled with the responsibility of announcing changes in fuel price or providing guidance on the new price, the Petroleum Products Pricing Regulatory Agency (PPPRA), had refused to publicise the guiding price of PMS since August 2020.

The agency had in June said it will no longer be fixing the price of the product for marketers but would rather offer a low and upper price range which allows marketers and consumers to make a choice.

The executive secretary of PPPRA, Saidu Abdulkadir, who disclosed this, however insisted that the agency would constantly, on a monthly basis, develop a guiding price for the commodity, with which it would advise marketers.

He stressed that the deregulation of the downstream sector was dependent on the enforcement of appropriate laws by strong regulatory agencies, hence its continued intervention.

Abdulkadir said the PPPRA no longer fixes prices, but rather provides a guiding price band by monitoring petroleum products prices daily.

On the rationale behind the decision, the executive secretary, in a statement said, “For the purpose of emphasis, let me reiterate that different sectors of the polity operate under the guidance of national regulators.

“The Central Bank of Nigeria (CBN) regulates the banks and the financial sector; Nigerian Communication Commission (NCC) regulates telecommunications; National Insurance Commission (NAICOM) regulates the insurance sector and the same exists for operators in Nigeria’s downstream petroleum sector.

“While the Market-Based Pricing Regime is a policy introduced to free the market of all encumbrances to investment and growth, it should not be misconstrued to mean a total abdication of government’s responsibility to the sector and citizenry”.

On his part, chairman of the Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, recommended that petrol should be closer to N155 per litre.

Oyebanji, who is the managing director/chief executive officer of 11Plc (formerly Mobil Oil Nigeria Plc), said this on Tuesday on CNBC Africa.

Petrol price was increased by marketers to between N148 and N150/litre in August, as the Petroleum Products Pricing Regulatory Agency remained silent as regards the guiding retail price for the month.

Following the sharp drop in crude oil prices which led to the reduction in the pump price of petrol in March, the PPPRA had said it would advise the Nigerian National Petroleum Corporation and oil marketing companies on the monthly guiding retail price at which the product shall be sold across the country.

Oyebanji said the under-recovery of N5.35bn recorded by the NNPC in June had to do with the inventory losses that would have occurred because of the reduction in prices at the time.

LEADERSHIP reports that the federal government in April bowed to long-standing pressure to restructure the downstream segment of the Nigerian oil industry through the removal of fuel subsidy.

This came as the global oil industry continues to grapple with the low demand and subsequent price slump that have been caused by the Coronavirus pandemic.

According to the GMD of NNPC, Malam Mele Kyari, Nigeria would no longer be paying for under-recovery or subsidy on petrol, especially due to the current development in the global oil sector.

In July, Kyari revealed that the federal government had saved over $400 million following the removal of its fuel subsidy policy in 2020.

Meanwhile, there are unconfirmed reports that most depots have detained trucks that had loaded on old price.


Labour, Reps, NANS, Others Reject Increment

Meanwhile, Nigerians yesterday rejected the increase in pump price of petrol to N151.56 per litre by the federal government and its subsequent hike to N162 per litre by oil marketers, saying the government was insensitive to the plight of the people, especially at a time the disposable income of the people is abysmally low.

The Nigeria Labour Congress (NLC), while reacting to the increase in pump price of fuel, said the government has taken Nigerians for granted, threatening that organised labour can no longer guarantee industry peace.

NLC president, Ayuba Wabba said, “Certainly we cannot guarantee industrial peace and harmony, and we will have to call our organs and we will have to also react but we reject it in its entirety.

“They have betrayed the trust of Nigerians, for Nigerians to be protected against the economic challenge that is affecting us”.

Wabba noted that labour will summon a meeting of all its organs to decide on the next line of action.

He said, “In fact Nigerians and even NLC we are at a shock, and this increase is coming at a time when many Nigerians are passing through very peculiar and precarious times.

“It’s like Nigerian are being taken for a ride, the increase in price of petroleum is like adding sult to injury.

“The increase in price of petroleum has happened now more than three times in three months, only yesterday they hiked the tariff of electricity. And to compound it they also reduced the interest rate of savings which affects mostly the poor and the vulnerable.

“While rejecting this with the strongest terms, I think Nigerian government is taking Nigerians for granted. At the end of the day, Nigerians are becoming poorer and poorer, in fact many people are already on the edge. Many workers are already on the edge.”

In the same vein, the Minority Caucus in the House of Representatives has rejected the increase in pump price of fuel from N148 to N151. 56 announced by the Petroleum Product Marketing Company (PPMC) on Wednesday.

The lawmakers, in a statement by the Minority Leader of the House of Representatives, Hon Ndidu Elumelu, described the announced increase as unacceptable as it will result in increase in the already high cost of consumer goods and services, as well as worsen the current economic hardship being suffered by Nigerians.

He said, “The minority caucus in the House of Representatives, rejects the announced increase in the pump price of fuel. This is because such increase will directly result in more hardship on our citizens, particularly at this critical time when majority of Nigerians, across the country, are struggling to survive under the burden of high cost of living and low purchasing power occasioned by the prevailing economic challenges.

“Any increase in the cost of essential commodity like fuel will therefore bring more hardship to the people and as such should not be contemplated”.

They also challenged the APC-led government to rather come up with strategies that will lead to decrease rather than increase in the cost of domestic fuel, including revamping our nation’s refineries, instead of always resorting to price increase, to the detriment of Nigerians.

The minority caucus directed the PPMC to immediately rescind its announcement and revert to the former price, with a view of a downward review.

Also, the National Association of Nigerian Students (NANS) rejected the hike, saying the increase in pump price of fuel from N148 to N151. 56 was totally unacceptable.

In an interview with LEADERSHIP, NANS president, ), Comrade Danielson Akpan said, “It’s completely unacceptable and is condemnable for a government that has promised to help take the people out of poverty should be coming up with policies that can be of help not increasing the poverty level.

“The government that has entrenched a lot of persons who had jobs before it came into governance and today they are now jobless; a government that has taken fuel price form N87 where they met it to over N140, increasing it from N145 to N151.

“All of us must rise up and speak against it; we must speak against it irrespective of our party. It is not about APC or PDP; everyone must rise up. Even the COVID-19 pandemic has led to a lot of people losing jobs and there is nothing, but all we can get as anything from the government is increment of fuel price.

A financial analyst, Mr Tope Adaramola, said the timing of the fuel pump price increase was wrong considering the fact that some people were just adjusting to the harsh reality that the coronavirus pandemic brought to the country.

He said government could have waited for some time until the situation subsides before introducing the new price.

He stated: “The purchasing power of Nigerians is low at this time and instead for government to unveil policies to cushion this, it is busy compounding the problem.

“Although the price increase is not that much, it is typical of Nigerians to always hike the price of goods and services whenever there is fuel pump price increase. Transporters, market men and women, among others, might begin to raise the price of their goods and services. Again, this is an eye opener on the need to diversify the economy and avoid relying solely on oil. The consistent price adjustment reflects the over reliance of the economy on oil.”

Similarly, the president of National Union of Textile Garment and Tailoring Workers of Nigeria ( NUTGTWN), Comrade John Adaji, said  labour will issue its statement on it at the right time.

He stressed however that it was gross insensitivity on the part of government to increase fuel price at a time like this.

Commenting on the development, the executive secretary of Major Oil Marketers Association of Nigeria (MOMAN), Clement Isong, pointed out the new directive by PPMC shows an increase in the ex-depot price of petrol, which means the new pump price will reflect further addition of cost incurred by each marketer.

“The directive by PPMC shows an increase in ex-depot price and when we buy at the depot at N151.56 per litre, we’ll add our transport to drive the product to the station, the wholesaler will add his own margin and in a situation where there’s a retailer, he will add his own margin also. So, the market is deregulated everybody will arrive at their own different prices depending on their costs,” he added.

When contacted, the president of Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Okonkwo, noted that he was not fully aware of the new directive, but acknowledged that the increase might be occasioned by the fact that the product is being deregulated.

Meanwhile, PPMC has insisted that the monthly guiding prices would still allow reasonable returns to operators

But most of the stakeholder operators like Independent Petroleum Marketers Association of Nigeria (IPMAN), Major Oil Marketers Association of Nigeria (MOMAN), and the Petroleum Products Retail Outlets owners Association of Nigeria (PETROAN) have decried the effect of the price changes to their business.

PETROAN president, Dr Billy Gillis-Harry, said his members had already been notified of the new change by Depot operators.

He said, “The depot owners are now selling at N151 per litre and by implication, for any marketer to cover overheads and other expenses implementation of this new prce regime will see Nigerians buying petrol at between N161 and N161.50 per litre.

“In the past when there was no cap, we added just N2 on a liter but today for us to survive we are looking at adding N10 on a litre. The issue here is that there is no competition and we all rely on the Nigerian National Petroleum Corporation (NNPC) for the product. Even when we decide to import we cannot access forex”.

Gillid-Harry who is also president, Bilview Energy Limited, insisted that only a round-table stakeholders’ engagement among the various downstream group operators, the leadership of PPPRA, NNPC, the Department of Petroleum Resources (DPR) and the ministry of petroleum resources will solve the problem.

On his part, national president of the Independent Petroleum Marketers Association on Nigeria (IPMAN), elder Chinedu Okoronkwo said his association was yet to receive the memo, but actual selling price cannot be determined until they begin to load based on the new price regime.

Also, Abuja Chamber of Commerce has said that deregulation comes with a price.

A statement issued by Director, Policy Centre, Olawale Rasheed, said once the oil sector is freed from government’s bridging support, market forces are likely to take over.

It noted: “The reality is that the price may go up now but market competition will drive such down in due course.

“There is a general outcry against fuel subsidy. In any case, government is largely cash strapped now. Hence necessity and public outcry necessitate removal of subsidy. So we are facing the consequence of market economy,” he said adding that the ultimate way out is for the country to develop and activate local production of PMS.

“If our refineries are functional, if private refineries come on stream, the problem will be largely resolved. So we can only urge the NNPC management to speed up the revitalization of the refineries and probably concession them to private operators. It is also hoped that when private refineries like the Dangote and the BUA projects are realised, the market will be fully supplied and price competition will eventually drive down the cost of PMS”.

But the Peoples Democratic Party (PDP) also rejected the fresh increase in the price of fuel to N151 per liter and electricity tariff to N66 per kwh, describing the increments as callous, cruel and punishing.

PDP therefore demanded an immediate reversal of the prices to avert a national crisis.

The party said the increase will result in upsurge in costs of goods and services and worsen the biting hardship being faced by Nigerians who are already impoverished and overburdened by APC-imposed high cost of living in the last five years.

A statement by the PDP national publicity secretary, Kola Ologbondiyan, noted: “Our party asserts that by increasing the price of fuel from the N87 per litre it sold under the PDP to an excruciating N151 while at the same time allowing the hike in electricity tariff from N30.23 per kwh to over N66, the APC has left no one in doubt that its agenda is to inflict pain and hardship on Nigerians to satisfy their selfish interests.

“The unjustifiable increase in the price of these essential supplies, coming barely a week after the APC brazenly posted a support for fuel price hike, while attempting to rationalize the excruciating hardship being suffered by Nigerians under the Buhari administration, has further confirmed that the APC is at the center of the harsh policies of the Buhari Presidency.

“It is distressing that the APC administration increased the cost of essential commodities at the time the leadership of other countries are offering palliatives to their citizens to cushion the effect of the COVID-19 pandemic. It is instructive to add that our nation is doomed under the APC watch.

“We know that the APC is an unfeeling party but it is indeed shocking that it could go to the extent of approving such a hike at this trying time, when many Nigerians are struggling to afford staple foods and other necessities of life.

Also, the Coalition of United Political Parties (CUPP) said it received with shock and disbelief the decision of the Buhari administration to approve what it called astronomical increase in fuel price at a time that Nigerians were already suffocating under the weight of numerous taxes.

The opposition political parties noted that the increase was coming barely one day after the increase in electricity tariff by this same government took effect.

A statement by the coalition stated: “We therefore reject this senseless, heartless, insensitive and wicked increase in its entirety. The CUPP holds the view that this latest poison from the chalice of the All Progressives Congress’ government is meant to kill more Nigerians with suffering contrary to the oath Buhari swore to protect them.

“We are therefore calling on this government to rescind this unpopular decision with immediate effect. Failure to do this, the CUPP will be taking a legal action to force this government to do so.

Similarly, the National Consultative Front (NCFront) yesterday condemned the increase in the ex-depot price of fuel.

In statement by the head, Public Affairs Bureau, Dr. Tanko Yunusa, it said it observed the melancholic mood of Nigerians following reports that the PPMC, a subsidiary of NNPC, had increased the ex-depot price of PMS from N138.62 per litre to N151.56 per litre.

The statement noted: “With the ex-depot price being the amount at which the product is sold to marketers at the depots, it is a no-brainer that this unconscionable hike by the Federal Government will translate to an increase in the pump price of petrol thus worsening the woes of Nigerians who have just been yoked with an increased electricity tariff amongst other devastating policies of government.

“We utterly regret that the administration is carrying on as if its sole aim of seeking and acquiring another term of political power is to punish Nigerians for a supposed grouse that has remained unclear.

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