Nigeria News

NIGERIA: Mixed Reactions Trail Reduction of Petrol Price

 Discordant tunes have trailed the federal government’s decision to slash the official price of petrol from N97 a litre to N87 a litre, with the ruling Peoples Democratic Party (PDP) hailing the directive, All Progressives Congress (APC) accusing the government of deception, while the labour unions have called for a further cut.

During an interactive session with journalists on Monday, the National Publicity Secretary of PDP, Olisa Metuh, dismissed critics who alleged that the government’s decision to slash the price of petrol by N10 was politically motivated, arguing that it was predicated on the reality of the international price of oil which has fallen by almost 60 per cent since June last year.

According to Metuh, “This is not the first time that we have had a fuel price reduction in this country. You will recall that the late President Umaru Yar’Adua reduced the pump price from N75 to N66. And it was sold at N66 for a very long time.

“That was not politics. He did it in June 2007 and there was no election around the corner. In this particular instance, oil prices crashed and the government and Minister of Petroleum decided that owing to the lower price of crude oil, there will be a reduction of fuel in Nigeria.

“It has nothing to do with the election. If the price remains where it is, there is no justification for any increase. So what Nigerians should be asking for now is complete deregulation of the industry so that it will be reflective of the world price.”

Also assessing the PDP presidential campaigns in the South-west and South-east zones, the party held the view that it has wide acceptability in all zones of the country, adding that the opposition APC cannot pull off a victory in any of the zones over the ruling party.

It further said that the violent Islamic sect, Boko Haram, would have overrun half of Nigeria, if not for the tactics employed by President Goodluck Jonathan in tackling the insurgency.

Metuh said the president’s train in these regions was overwhelmed by the support shown by the electorate, which thronged out to welcome Jonathan and the party to their respective states.

He noted that as the campaign commences in the North-west zone, the party would proudly showcase its numerous achievements in railways, agriculture, education and others.

He pointed to the construction of 150 Almajiri schools and the establishment of nine universities in the North out of the 14 new universities created by the Jonathan administration.

Metuh said that the PDP would post a victory in the forthcoming election because it had justified the last 15 years in power, especially in the last six years of the Jonathan administration.

“Zone by zone we are going to beat the opposition. There is no zone where the APC will beat the PDP,” he boasted.

Dismissing the view of critics on the poor handling of the insurgency in the North-east by the PDP-led government, Metuh said had the Jonathan administration not withstood the insurgency in the manner it did, half of the country would have been overrun.

On the issue of defections by some of its members as was the case in Ogun, Ondo and Niger States, he pointed out that while the party had lost some members, its ranks had been swelled by others as was the case in Kano where the PDP lost a sitting governor and got a former governor in the state who moved with his people to the party.

Speaking on the endorsement of the APC governorship candidate in Ogun State, Ibikunle Amosun, by former President Olusegun Obasanjo, Metuh said the PDP, which provided the platform for him to occupy the number one office in the land at the dawn of democracy, still respects him as a father.

He said whatever views the party holds would be communicated to him during private engagements, as he remains a respected elder of the party whose achievements during his tenure contributed to the performance that the PDP is showcasing in its present campaign train across the country.

“We have very deep respect for the former president. The PDP brought him back into reckoning and provided him a platform to become president.

“We will not trade words with him. This party (PDP) respects him and needs his support. Whatever issue we have to raise with him, we will engage him in private and not in public," he said.

The PDP spokesman also called on the police and Economic and Financial Crimes Commission (EFCC) to investigate allegations that some members of the National Working Committee (NWC) of the PDP allegedly collected N750 million from Dumebi Kachukwu to facilitate the governorship ambition of Hon. Ndudi Elumelu, a former governorship aspirant in Delta State.

On the suspension of the former National Chairman of PDP, Alhaji Bamanga Tukur, Metuh described Tukur as a committed member of the party that had served the party diligently.

On its part, APC said day that the pump price of a litre of petrol should not exceed N70.

The party also accused the federal government of deception by its so-called fuel price reduction, saying a 10.3 per cent slash in the price of petrol was tokenism at a time the price of crude oil had crashed by about 60 per cent.

In a statement by its National Publicity Secretary, Alhaji Lai Mohammed, the party said the pump price of a litre of fuel should not be more than N70, adding that the government was forcing Nigerians to subsidise the massive corruption in the oil sector by N17 for every litre of fuel.

“When crude oil was selling at $100 per barrel, the landing cost of PMS without subsidy was N125 a litre. Now that the oil price has crashed to about $44 per barrel (sic), the landing cost without subsidy is about N65 per litre.

“The same goes for diesel which should not sell for more than N90 per litre,” it said.

APC noted that while governments of countries, which are not as economically endowed as Nigeria had reduced the pump price of fuel as far back as early January 2015, Nigeria which is the world’s sixth largest producer of oil, is just announcing a price slash that is far below those countries.

“Early this year, Zambia slashed the price of petrol by 23 per cent while Tanzania reduced the pump price of the product by 16%. In the US, which until recently was importing crude oil from Nigeria, the price of fuel has fallen for 113 consecutive days as of January 16.

“Therefore, the 10.3% price slash in Nigeria is too meagre, too late,” the party said.

It blamed the government’s delay in slashing the price of imported petroleum products following the crash in crude oil prices on massive corruption in the oil sector and lack of political will on the part of the country's leadership.

“With Nigeria depending on importation of petroleum products to meet about 90% of its domestic consumption, the country is relying heavily on term contracts entered into with petroleum product trading companies to meet its domestic demand.

“It is possible that the petroleum products pricing formulas embedded in these contracts, which generally run for up to one-and-a-half years and in some cases two years, have not anticipated these low prices.

“Therefore, unless the government moves to renegotiate the contracts now, it may not reap the full benefits of the decline in petroleum prices. But here is the catch: Since the government and its agents have skimmed off huge ‘commissions’ from the firms with which the term contracts were signed, it could not possibly go back and renegotiate those contracts or go into new forward contracts that will reflect the current reduction in crude oil prices.

“It takes a strong willed, determined and transparent leadership to immediately call in the petroleum products contracts for re-negotiations, as this will represent a huge blow on corruption in the sector since clearly ‘commissions’ would have been paid by petroleum product traders on the existing contracts.

“This explains the token reduction in the fuel price, which the government must have hoped will fool an unsuspecting public, especially a few weeks to elections,” APC said.

The party also wondered why the PDP-led federal government had to wait for a widely publicised call by its presidential candidate, Gen. Muhammadu Buhari, and some other concerned Nigerians before doing what the government of other countries in Africa and elsewhere around the world had already done.

It called on the federal government to immediately slash the price of petrol to N70 a litre and the prices of diesel and kerosene (the official price of kerosene in N50 a litre) to nothing more than N90 a litre respectively, and stop stealing from Nigerians, who have been pauperised by its bad record of governance since 1999.
APC’s call for a further reduction in the official price of petrol was supported by the labour movement, which at the same time lauded the federal government for cutting the price to N87 a litre in the first instance.

In a statement yesterday, the Nigeria Labour Congress (NLC) said it was not entirely impressed, stating: “While we describe the reduction as a welcome one, it believes that the reduction is not enough.” It also called for a reduction in the price of diesel from N160 a litre.

The NLC added that the reduction by the government was done by fiat, as it is the Petroleum Products Pricing and Regulatory Agency (PPPRA) relying on the existing price template that could arrive at a fair and just price reduction.

In the statement signed by its General Secretary, Dr. Peter Ozo-Esan, the NLC commended the government for heeding its clamour for a fuel price reduction following the sustained price slump of crude oil in the international market.

It however noted that since the government had already devalued the naira substantially, the full benefits of the falling crude prices could not be passed on to Nigerians with the reduction amounting to just 10.3 per cent compared to 33 per cent in most countries.

“The price reduction we envisaged is the one that will operate within the institutional framework of PPPRA. The logic of our reasoning is hinged on the premise that only the PPPRA is charged with the statutory responsibility of determining petroleum product prices based on a relatively acceptable template,” the NLC said.

The NLC observed that the PPPRA board, of which labour is a statutory member, had been sidelined for too long and should be constituted immediately to discharge its statutory functions.

“However, beyond the issue of the price reduction of PMS, the regulatory agencies in the downstream sector of the oil industry need to protect Nigerians against monopolistic exploitation.

“We make bold to refer to the unacceptable price manipulation by monopolies in the oil sector where prices have remained unreasonably high for diesel, which is deregulated.

“The regulatory agencies are called upon to break this stranglehold on consumers,” it said.

Also, the President General of the Trade Union Congress (TUC), Mr. Bobboi Kaigama, hailed the reduction which the congress said it had been clamouring for since oil prices began to fall in the international market.

In his contribution, the President of the National Union of Teachers (NUT), Dr. Michael Alogba, in a telephone conversation with THISDAY, called for a further price reduction to N50 a litre, while the General Secretary of the Senior Staff Association of Nigerian Universities (SSANU), Mr. Promise Adewusi, said the reduction was a welcome development even if it is seen as a “political manoeuvre” by the government.

In a text message to THISDAY, Adewusi called for a reduction in the price of kerosene, which is used as a cooking fuel by many Nigerians.

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