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Petrol to sell for N145 per litre as new import regime opens

The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, who disclosed the move while briefing State House correspondents in Abuja said it was arrived at after wide consultations with major stakeholders in the industry.

The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, who disclosed the move while briefing State House correspondents in Abuja said it was arrived at after wide consultations with major stakeholders in the industry.

• Any Nigerian entity is now free to import fuel
• NLC meets tomorrow, may protest new price
• Oda warns against policy, Fayose says govt is insensitive

A plan by the Federal Government to deregulate the petroleum sector has begun as premium motor spirit (PMS), also known as petrol, is now to sell around N145 per litre.

The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, who disclosed the move while briefing State House correspondents in Abuja said it was arrived at after wide consultations with major stakeholders in the industry.

He said that the meeting was presided over by Vice President, Yemi Osinbajo, with representatives of major trade unions in attendance.

The meeting took place at Aguda House, the official residence of the vice president. Journalists were barred from covering the proceedings.

Reading from a prepared text, the minister, who is also the Group Managing Director of the Nigerian National Petroleum Corporation, (NNPC) said: “We have just finished a meeting of various stakeholders presided over by His Excellency, the Vice President of the Federal Republic of Nigeria.

“The meeting had in attendance the Leadership of the Senate, House of Representatives, Nigerian Governors Forum (NGF) and Labour Unions (NLC), Trade Union Congress (TUC), National Union of Petroleum and Natural Gas, (NUPENG) and Petroleum and Gas Senior Staff Association of Nigeria (PENGASSAN).”

He added: “The meeting reviewed among others the current fuel scarcity and supply difficulties in the country; the exorbitant prices being paid by Nigerians for the product. These prices range on the average from N150 to N250 per litre currently.

“The meeting also noted that the main reason for the current problem is the inability of importers of petroleum products to source foreign exchange at the official rate due to the massive decline of foreign exchange earnings of the Federal Government. As a result, private marketers have been unable to meet their approximate 50% portion of total national supply of PMS.

“Following a detailed presentation by the Honorable Minister of State for Petroleum Resources, it has now become obvious that the only option and course of action now open to the government is to take the following decisions.

“In order to increase and stabilise the supply of the product, any Nigerian entity is now free to import the product, subject to existing quality specifications and other guidelines issued by regulatory agencies.

“All oil marketers will be allowed to import PMS on the basis of FOREX procured from secondary sources and accordingly PPPRA template will reflect this in the pricing of the product.”

He added: “Pursuant to this the Petroleum Products Pricing Regulatory Agency (PPPRA) has informed me that it will be announcing a new price band effective today (yesterday) 11th May, 2016 and that the new price for PMS will not be above N145 per litre.

“We expect that this new policy will lead to improved supply and competition and eventually drive down pump prices, as we have experienced with diesel. In addition, this will also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector. It will also prevent diversion of petroleum products and set a stable environment for the downstream sector in Nigeria.

“We share the pains of Nigerians but, as we have constantly said, the inherited difficulties of the past and the challenges of the current times imply that we must take difficult decisions on these sorts of critical national issues. Along with this decision, the Federal Government has in the 2016 budget made an unprecedented social protection provision to cushion the current challenges.

“We believe in the long term, that improved supply and competition will drive down prices. The Department of Petroleum Resources (DPR) and PPPRA have been mandated to ensure strict regulatory compliance including dealing decisively with anyone involved in hoarding petroleum products.”

But he refused to entertain questions from correspondents.

Later yesterday, the PPPRA stated that the measure is strictly within its power, saying, “in furtherance of its mandate to ensure the efficient supply and distribution of petroleum products, the Petroleum Products Pricing Regulatory Agency, (PPPRA), hereby announces, effective immediately that the new price band for PMS shall be at a maximum of N145/litre. However, NNPC retail stations on the outskirts of major cities are advised to sell at price lower than N145/litre.”

The Acting Executive Secretary of PPPRA, Mrs. Sotonye Iyoyo explained that the review became imperative in the face of extreme difficulties faced by petroleum product importers in sourcing foreign exchange.

She added that in order to meet the consumption demand of the nation, importers now have the latitude to source their foreign exchange requirements from secondary sources.

PPPRA stated that it was conscious of the difficulties that Nigerians have been going through in the last few months and to ameliorate this situation, it shall continue to modulate pricing in accordance with prevailing market dynamics thereby ensuring fair value to all citizens.

Confirming the meeting, the General Secretary of the NLC, Dr. Peter Ozo-Eson, said TUC and the NUPENG participated in the meeting.

He also disclosed that the National Executive Council (NEC) meeting is already scheduled for next Monday and that part of what would be discussed is the latest development in the downstream sector.

His words: “Well, the meeting held and was chaired by the vice president. It is also true that the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, made a presentation stating the urgency of the introduction of deregulation.

“Questions were asked mostly from our side and answers were provided. But we did not give any commitment. We have already slated our NEC meeting for next week Monday and I suspect that what will be discussed at the meeting will be this latest development.”

This is happening as the President of the NLC, Ayuba Wabba, is currently in Brussels for a meeting with the International Trade Union Confederation (ITUC).

Later yesterday, the NLC gave a directive to all its affiliates and civil society allies to begin mobilisation for a national protest and strike against the increase of petrol price. The congress vowed that it would resist the deregulation policy introduced by the Federal Government.

In a statement yesterday in Abuja, the NLC said that the price increase was unilateral and that it represents the height of insensitivity and impunity and would be resisted .

The statement by Ozo-Eson in Abuja yesterday said with the imposition on the citizenry of criminal and unjustifiable electricity tariff and resultant darkness and other economic challenges brought on by the devaluation of the naira and spiraling inflation, the least one had expected at this point in time was another policy measure that would further make life more miserable for the ordinary Nigerian

He insisted that the latest increase is the most audacious and cruel in the history of product price increase as it represents not only about 80 per cent increase but it is tied to the black market exchange rate.

He explained: “Furthermore, the process through which government arrived at this is both illogical and illegal as the board of the PPPRA is not duly constituted. In our previous statements and communiqués , we had stressed the need for reconstituting the boards of NNPC and PPPRA and wean both away from the overbearing influence of the Minister of State for Petroleum Resources who has assumed the role of a Sole Administrator.”

He stressed that the allusion to the fact that the this increase was arrived at after due consultation with stakeholders was not only ridiculous and fallacious, it showed that the brief meeting held yesterday during which government was advised to shelve the idea until at least it meets with the appropriate organs of the congress was not heeded.

It therefore, urged government to revert the prices to what they were. ‘‘We would want to put everybody on notice that we shall resist this criminal increase with every means legitimate,’’ it added.

The statement confirmed that an emergency NEC meeting has been scheduled for tomorrow to decide on the next line of action. It added that all NLC’s affiliates, state councils and civil society allies are requested to commence mobilisation for civil disobedience and protests immediately.

The Guardian can confirm that those at the meeting included the Deputy Senate President, Ike Ekweremadu; Speaker of the House of Representatives, Yakubu Dogara, Kaduna State Governor, Nasir El-Rufai; Chairman of Governors’ Forum and governor of Zamfara State, Abdulaziz Yari and Imo State Governor, Rochas Okorocha.

It was learnt that the government functionaries explained why deregulation must happen now in the face of low oil price.

It was learnt that Kachikwu argued during his presentation that government may no longer be able to guarantee supply if the deregulation is not introduced in the next few weeks.

The minister also admitted that the price modulation regime introduced in January this year has failed hence the need to introduce a direct deregulation policy.

Meanwhile, the immediate past General Secretary of NLC, who is also the Executive Secretary of the Organisation of Trade Unions of West Africa (OTUWA), John Odah, has cautioned the Federal Government against introduction of deregulation of the downstream of the oil and gas industry.

At the opening of a strategic planning workshop of the regional body in Abuja yesterday, Odah explained that the challenges plaguing the sector is not about pricing but inability to refine products in the country.

Revealing why introduction of deregulation policy may spark another round of civil unrest, Odah said: “If government goes ahead and deregulate the downstream which would lead to price increase, there would be a lot of chaos in the country because Nigerians are already barely surviving the economic onslaught as a result of the 45% increase in the electricity tariffs. Whoever has advised President Muhammadu Buhari to go and officially add to the inflationary trend by increasing the price of fuel does not have the interest of the president and this country at heart and wants him to go down as one of the leaders that Nigerians expected so much from but who eventually led them down.”

But in his response, the Minister of Labour and
Employment, Dr. Chris Ngige, said government would not remove the subsidy without engaging the relevant stakeholders saying, “we have not deregulated. Everything within the labour parlance is about dialogue. Labour and employers would be invited and we can then discuss because the deregulation of the downstream is a major factor in the Nigerian economy. I believe that there would be no labour unrest because things would be discussed on the basis on collective bargaining.”

In his reaction, Ekiti State Governor, Mr. Ayodele Fayose, condemned the development, describing it as insensitive and demonstration of the level of hatred the President Muhammadu Buhari-led All Progressives Congress (APC) government has for Nigerians.

The governor, who said the over 70 per cent increase was another vindication of his predictions on what to expect in 2016, added
that it was now clear that the scarcity of petrol being experienced in the last three months was deliberately orchestrated by the Federal Government to pave the way for the already pre-conceived increase.

According to his Special Assistant on Public Communications and New Media, Lere Olayinka, Fayose said: “Nigerians are now left at the mercy of political liars who took over power by deception and are governing by deceit.
He said he was waiting for the reaction of those who took to the streets to protest when fuel subsidy was removed by the Dr. Goodluck
Jonathan administration in 2012, urging labour unions in the country to stand by their members always, not minding the political party in government.”

He said: “When they were seeking votes from Nigerians, they promised to reduce petrol pump price from N87 to N45 per litre, they promised to create three million jobs per year, they said $1 will be equal to N1 and above all, they promised to pay unemployed youths N5, 000 stipend and provide one meal a day to pupils
nationwide.

“Instead of fulfilling their promises, they have increased petrol pump price to N145 per litre, increased electricity tariffs, retrenched thousands of workers and imposed untold hardships on Nigerians. As they did in 2012, if labour leaders do not also stand up for the people at this time, posterity will not forgive them.”

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9 Comments
  • Mizch

    At 145 Naira official price, Nigerians are not going to experience CHANGE. Things have changed ooooh!

  • eyobaba

    Femi, am laughing in Chinese, are you tired of leading street protest or now that your beloved party is in power, everything they do is great. The truth died yesterday.

  • bobo

    They should just let market forces determine the price, but that is if Nigeria were a different and disciplined country.

    The prices of petroleum products are allowed to fluctuate in many countries based on the current price of crude oil. In doing so, it could be 145 today, 100 tomorrow, or even, 150 the following day. No one will complain then because they might be paying a lot less than they’re currently paying the following day.

    • Bernard Ebuehi

      That is the best thing to do, but I don’t know our leaders adviser really are. They will kill this country very soon

  • Potters Court

    It’s time to go to Mars! Change laboratory scientists have failed to balance their equation! Stoichiometrically, this change spectrum at this moment of economic recession will not help the masses. There is hardship in this diaspora at the moment, increasing fuel prices will only add to the suffering!

  • ose bell

    I seriously do not understand buhari’s govt. UK queen and prime minister mocked him that he is corrupt and he decides to increase the price of fuel, pls someone should tell him that we are Nigerians and not uk citizens that he should punish. After all the mouth he made during the campaign period. UK is right he’s also a corrupt leader how can u just wake up and increase the price of fuel at least GEJ (may God bless him)gave us heads up in his time. This govt has failed Nigerians in so many ways in 1yr. Arise citizens and owners of this great land and shut down this government before it does more harm to our dear country. As for me I am going to benin republic to settle down and start life all over again=))

  • salele

    If we think that righting the wrongs of the past is going to take 4 years of APC we better think again. The pains of doing away with the past is going to be long and hard. Making these painful and difficult decisions is the only way out of our present predicament. We should be grateful that this government has started. When you want to criticize this government move, just stop and think of what would have happened if it was the previous government that were in power with the present low earnings from oil.

    • Anick4u

      By the time they settle down to now right the wrongs of the past (in 4 years), they will have been preparing their being swept out of the corridors of power in Nigeria. Eventhough I never, for once, supported apc bcos I didn’t need a prophet to tell me what would be happing (as is now happening). Even my friends that were ready to slap me then, are now sincerely regretting. It is not their fault because goodies, goodies and goodies were deceitfully promised everybody, including the youths. Time will surely tell!

  • Ujay

    Everyday new story. In February he said the fuel cues will disappear in May. This is May he has doubled the price and telling another six months therapy. Will this govt. please admit that they dont know exactly what to do. When Jonathan increased fuel price to #97. This APC called him all sorts of names. Now we have seen that talk is cheap

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