N170 petrol pump price hike: Giving considerations to the prevailing economic conditions

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The Petroleum Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), had last Thursday increased the ex-depot price of Premium Motor Spirit (PMS), popularly known as petrol, from N147.67 per litre to N155.17. Following the announcement, the Independent Petroleum Marketers Association of Nigeria (IPMAN) had in reaction declared that the implication was that the pump price of petrol would be pegged between N168 to N170 per litre. The development has since then continued to generate reactionary responses, as Nigerians who are already feeling the heat of economic downturn and depression are beginning to express grievances over the unbearable effects the new pump price will have in heightening living conditions in the Country.

The Peoples Democratic Party (PDP)  had on Friday urged President Muhammadu Buhari to reverse the increase in the pump price of PMS which increased significantly from N159 to N170 per liter. The Party in a statement issued by its National Publicity Secretary, Mr Kola Ologbondiyan, had rejected the increase, describing it as unbearable to Nigerians. The Party while decrying that it was also unacceptable given the prevailing economic crunch already confronting Nigerians, insisted that the increase in the pump price would worsen the already “suffocating economic” situation in the Country. According to the Party, the hike would be an additional log tied on the economic neck of Nigerians. Stressing that the government had no justification to increase the cost of fuel to anything above N100 per liter, let alone N170, the Party stated that there was no such justification when there were practical options to maintain affordable prices given Nigeria’s production capacity and potentialities.  The Party also added that the government had yet to come clean on the parameters being used for the hike in prices vis-a-vis Nigeria’s production, export, and accruing revenue.

The statement had read partly: “It is evident that the continuous increase in the pump price of fuel under opaque and nebulous indices is a product of incompetence and large scale corruption being perpetrated by a few individuals in the Buhari administration, who are bent on fleecing Nigerians and holding our nation to ransom. Our party notes that the APC (All Progressives Congress) administration has failed to come clean on the parameters being used for the hike in prices vis-a-vis our production, export and accruing revenue. Indeed, the APC administration is not being honest with Nigerians regarding the status and volume of oil production, sales and accruing revenue. This is in addition to its failure to fix our refineries and end crude oil theft, allegedly to aid APC interests. This appears to provide answers to why the APC administration has failed to offer any explanation on huge fraud going on in the management of our nation’s oil resources including the alleged stealing over N9.6 trillion ($25 billion) by APC interests, as detailed in the leaked NNPC memo. It has also failed to publish details of its sleazy oil subsidy regime, including the involvement of APC interests in the claimed under-recovery for unnamed West African countries, running into trillions of naira, while Nigerians are made to bear the burden of high fuel costs. President Buhari should also take steps to fulfill his promise to revamp our refineries or accept his failures and apologize to Nigerians. It is still not yet late for him to get more competent hands to run our oil sector instead of imposing more hardship on Nigerians.”

Recall that Nigerians early September 2020, began paying about 10 per cent increment for petrol when the government’s deregulation policy took effect. The September announcement had pushed up the pump price of petrol by about 10 per cent of about N161 from about N145. In March, the  government had announced that it would scrap subsidies on petrol and allow market forces to determine the retail price of the product.

It is essential given the present circumstances of deepened economic crisis with harsh conditions, that the Government put into consideration the workability of the recent development. The fact remains that the effects of the Government’s deregulation policy at this material time would continue to make the ruling government unpopular, as citizens majority of whom are passing through unpalatable situations may no longer bear and reason with the Government on the heightening of economic hardship. The necessity for the Government to consider some rebalancing in the short run is essential.

Citizens who are bound to experiencing difficult times with sporadic increase in the price of petrol, a major source of energy in the production line of the Country’s economy, would be subjected to hardened conditions that may lead them to unhealthy and unsavoury resorts. The effects of the price increase hold strings of bearings to production cost across lines of the economic chain, with effects on the total productIvity of the macro-economy. Citizens who are already stiffened with the prevailing economic depression will now be subjected to the fate of increase in prices of goods and services, thereby diminishing their purchasing power in the face of no income increment. The situation is tantamount to eroding the purchasing   power of the average, low and minimum income earner.

It is high time the Government put into consideration, the necessity to adjust the prevailing policy in the short run. In the long run, the Government should make efforts to fixing the Country’s refineries which have gone into comatose. The necessity to develop a virile refinery industry in the Country is sine qua non to ending the vagaries of fuel price in the Country and the associated economic inconsistencies it bears on the Country’s macro-economy. The present Government had so promised to make refineries working in the Country. It is therefore a breach of trust and gross failure, if at the end of the term of the present administration, Nigeria is still left in the darkness of refined product importation. A virile refinery industry in the Country holds huge economic potentials and benefits Nigeria have continued to lose. It is essential that the present President Buhari-led government muster all efforts towards making this a reality.