…Petrol price rising by 8.2% as Bonny Light hits $59.46 per barrel
…Be ready to bear pains of high petrol cost, FG tells Nigerians
…Nigerians can’t take another hike – Labour
By Victor Young, Luminous Jannamike & Obas Esiedesa
Minister of State, Petroleum Resources, Chief Timipre Sylva, has admonished Nigerians to be ready to bear the pains of increased petrol pump price as crude oil price climbs above $60 per barrel.
Speaking at the official launch of Nigerian Upstream Cost Optimisation Programme in Abuja yesterday, Sylva said with no provision of subsidy in the 2021 budget, the Nigerian National Petroleum Corporation, NNPC, cannot continue to bear the cost of under-recovery.
At present, the pump price of petrol ranges from N160 –N165, the price band set when crude traded just above $43 per barrel four months ago.
President of Nigeria Labour Congress, NLC, Ayuba Wabba, in a swift reaction yesterday, warned that Nigerians and businesses in the country would not be able to cope with another hike in the pump price of petrol.
He said: “I am not sure Nigerians would be ready to bear any more pain at this time because of the fact that a lot of factors have affected the economic, social and even the well being of Nigerians.
“So, any additional pain at this point in time certainly will not be taken lightly. As you are aware, the NLC said it would have to discuss even the issue of technical report on the September 2020 increase which we could not adopt at the last meeting of the National Executive Council. Certainly, it’s a thing that we cannot swallow.”
Also reacting, President, Trade Unions Congress of Nigeria, TUC, Quadri Olaleye, said: “The question is why is government always quick to tell us about the rise in the price of crude in the international market and the need to increase the price of PMS here when it always takes them weeks, if not months, to implement agreements reached with Organised Labour? It all points to one thing: they are insensitive to the plight of the poor people of this country.
“In every move and statement by government officials, you could see and feel their care-free attitude and indifference to our plight. It appears they are not disturbed by the poverty of Nigerians and the unemployment/insecurity situation that their obnoxious policies have created in the country. There is nothing honourable about what the minister has said.
“Nigeria is among the six oil producing countries in the world. Reports have it that our oil is one of the best, giving us an edge over others. Unfortunately, we have not taken advantage of that. We have four refineries that are not functional.
“Why are they not functional and why is government closing its eyes to it? Their refusal to attend to them is the reason the country is subjected to the vagaries and volatility of the price of crude in the international market.
The TUC, and indeed, organised labour, is trying seriously to avert a major industrial crisis. We have tightened our belts so hard, to the extent that we are finding it difficult to breathe but government seems not to care. We are appealing to government to have a change of heart and put on a human face.”
Increase necessary — Petroleum Minister
However, the minister insisted that the increase was necessary, saying while government revenue has improved by the rise in crude oil price, money released therefrom would not be frittered away in subsidy payment.
He said: “Since we are optimizing everything, NNPC needs to also think about 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. So we want to take the pleasure and we should as a country be ready to take the pain. Today the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy.
“So, somewhere down the line, I believe the NNPC cannot continue to take this blow. There is no way because there is no provision for it. 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.”
‘Oil production begins in N-East’
The minister had earlier on Monday night, revealed plans by the Federal Government to begin oil production in the North-East.
Speaking during a recent interview on Channels Television’s Newsnight programme in Abuja, which aired on Monday night, Sylva said: “I have said it a few times that we have found oil in the northeast and we have started drilling activities in the Lake Chad Basin.
“I don’t know how the discovery of oil in the area will impact all the issues there but on our side, we believe that in a very short time, we will start production.”
The minister also lamented that the COVID-19 pandemic has changed the world’s narrative, including that of the oil and gas industry.
He recalled that the recent meeting held by the Organisation of Petroleum Exporting Countries, OPEC, in which Nigeria is a member was held virtually, noting that such meetings were not envisaged before the COVID-19 era.
Sylva also reacted to piracy, oil bunkering and illegal refining in the oil-producing region, saying such activities had reduced compared to what obtained in the past.
“Pipeline vandalism is less than it used to be. Before now, we had less than 50 per cent production, I can assure you that pipeline vandalism is less than it used to be. If you compare what happens now with what obtained in the past, I think it is less now.
“There is still a lot of piracy, I understand, but the law enforcement agencies are dealing with it. We are looking at other ways of dealing with it and believe that in a very short time, we will be able to get the full handle on it,” he added.
Speaking on gas conversion, the Minister explained that the policy was necessitated by the Federal Government issuing an alternative to Nigerians, following the deregulation of oil that will lead to the rise in oil prices.
While noting that gas remained a cleaner and more efficient fuel, the Minister regretted that previous administrations had not developed the nation’s gas, stressing that Nigeria’s gas penetration was the lowest in Africa.
CSOs blast FG
Also reacting yesterday, civil society groups took a swipe at the Federal Government for announcing plans to raise the retail price of Premium Motor Spirit, PMS.
Executive Director, Civil Society Legislative Advocacy Centre, CISLAC, Auwal Musa Rafsanjani, said: “When you have officials that seem to be celebrating the suffering of Nigerians there is nothing surprising from such official comment.
“One wonders what are the benefits the people get from Nigeria being an oil producing country. Nigeria’s oil is a big opportunity for institutional corruption because in the name of fuel subsidy and fuel and importation.
“Scams and corruption in the oil industry overwhelm governance systems. Consequently, the governments are not meeting the expectations of Nigerians.
“Why is this that, if oil is cheap in the global market, Nigerians do not enjoy any drop in the price of the refined petrol? That is to tell you something is fishy with the planned hike.”
Cushion effects of rise in global oil price on Nigerians – Free Nigeria Movement
In the same vein, the Convener of Free Nigeria Movement, Mr. Raphael Adebayo, urged the Federal government to seek ways to cushion the effects of the rise in global oil price on Nigerians rather than impose austerity on the people.
He said: “This does not come as a surprise. The approach of Buhari and his entire cabinet to public policy is nothing but economic hardship and downright disaster.
“Another increase in fuel price will only make the living reality of ordinary Nigerians unbearably pathetic.
“We are still dealing with over 100% increase in electricity tariff, inflation, economic recession and the sudden move to prohibit crypto-transactions in the country.
“What the Buhari regime needs to do is look inward to cushion the impact of the rise in global oil price, rather than go on another all-out offensive to impose austerity on its citizens. But the regime is tone-deaf and will never listen to the voice of reason.
“It is left to Nigerians to not sit idly by and watch the regime ride roughshod over our right to a decent life with another avoidable increase in fuel price. Nobody — not even the NLC whose bark is worse than its bite — can save ordinary Nigerians from this regime, but ordinary Nigerians themselves.”
Nigerians must resist implementation of the planned hike in fuel – Concerned Nigerians
On his part, Deji Adeyanju, the convener of Concerned Nigerians, said Nigerians must wake up and resist the move to increase the pump price of fuel.
His words: “What will Nigerians use to buy the fuel at the hiked price? Is it their blood? Have Nigerians not had enough of the maladministration? Why is it always hardship upon hardship for the people of Nigeria?
“We believe the hardship in the country is more severe than COVID-19 and other pandemics. So, we condemn, in its entirety, the plan to hike the fuel price.
“We also say that, if the hike is implemented, Nigerians must wake up, challenge the government, and call for an end to the oppression.”
Petrol price up by 8.2% as Bonny Light hits $59.46 per barrel
The price of petrol, yesterday, rose by 8.2 per cent as the price of Bonny Light, Nigeria’s premium oil grade, hits $59.46 per barrel in the international market.
A market survey by Vanguard, Tuesday, indicated that, the price of petrol, which previously sold at N162 per litre, may rise to N175 per litre in many private outlets, indicating an increase of 8.2 per cent.
Market watchers, who spoke to Vanguard, attributed the development to the rise of crude oil prices from an average price of $56 to over $60 per barrel in the past few days, meaning that refiners around the world have incurred additional cost in the process of procuring and refining the product.
According to them, the cost has been shifted to consumers in Nigeria, especially as the nation, currently import a bulk of its petroleum products from the international market.
A visit to some private depots in Lagos, and its environs showed that the landing cost of the product hovers at between N157 and N157.50 per litre, compared the previous rate of about N150 per litre.
For instance, Master Energy and Shorelink put their landing cost at N157 per litre, while others put theirs at between N157 and N158 per litre.
In a telephone interview with Vanguard, the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mike Osatuyi, said: “The rise in the price of crude oil is the major determinant of the changes in the market. We are still watching developments. But the situation remains unchanged in the Nigerian National Petroleum Corporation, NNPC depots.”
However, the depot price of petrol remains unchanged at N148.70 per litre the NNPC outlets, meaning that the Federal Government, which did not provide for fuel subsidy in its 2021 budget, would continue to bear the burden through the Corporation.
Petrol price movements under Buhari
The first adjustment under President Buhari occurred on May 11, 2016, when the price was raised by 66.67 per cent to N145.
This was followed by downward review March last year, to N125 following drop in oil prices in the global market and deregulation of the downstream sector of the oil industry and hence removal of subsidy.
The price was raised again in May 2020 to a band of between N121.50 to N123.50 per litre for petrol. This was followed by another upward review in July to a band of N140.80 – N143.80 per litre. In August, the price was readjusted to N148 – N150, and further to price of N162.44 per litre in December following continued rise in crude price.