Petrol price reduction too small –NLC, TUC, APC

20 January 2015, Abuja – The leadership of the Nigeria Labour Congress and the Trade Union Congress on Monday  called on the Federal Government to come out with a more realistic template for determining the right cost of a litre of petrol in the country.

A floating NNPC fuel retail station.

A floating NNPC fuel retail station.

Although the groups welcomed the reduction of the pump price from N97 to N87 per litre, they argued that it was far from what the cost of the product should be.

They spoke just as most filling stations still sold petrol at the old price of N97 instead of the N87 announced on Sunday night by the Minister of Petroleum Resources, Diezani Alison-Madueke.

The NLC, in a statement by its General Secretary,   Peter Ozo-Eson , said the reduction was “not sufficiently deep enough.”

It argued that the N10 reduction was not substantial enough as it translated to only 10.3 per cent per litre as against the 33 per cent reduction in other countries.

The congress also said that the   government had denied Nigerians the full benefits of the falling price of crude oil in the international market with the devaluation of the naira.

It   said, “The reduction in the pump price of Premium Motor Spirit from N97 to N87 per litre is a welcome development. However in our estimation, it is not sufficiently deep enough.

“Prior to this price reduction, government had substantially devalued the naira, thus ensuring that the full benefits of falling crude price are not passed on to Nigerians.

“The N10 price slash translates to 10.3 per cent reduction compared to 33 per cent price reduction in most countries. For instance, in the United States the price dipped to under $2   from $3 per gallon.”

The NLC also said that the price reduction should have come from the board of the Petroleum Products Pricing Regulatory Agency, the body entrusted with the responsibility of fixing the prices of petroleum products.

The labour body however   appealed to   transport operators to ensure that Nigerians benefitted from the price reduction.

TUC, through its President, Bala Kaigama, also   urged the government to come out with a more realistic template that would be beneficial to the citizenry.

It said, “That they have attempted to be sensitive to the demands of the people is enough for us to commend.

“We however   urge them to be more sensitive particularly in the area of working out a more realistic template. They have started, the price is going down, we need a more realistic template that would make Nigerians to benefit from the impact of the falling oil prices.”

Also on Monday, the Nigeria Employers’ Consultative Association   said the reduction in the pump price of petrol should have been accompanied by the complete deregulation of the downstream sector of the oil and gas industry.

Though it commended the review, it noted that it was shameful for a foremost producer of crude oil in Africa to rely on importation of refined products for consumption locally.

NECA stated that the opportunity presented by the slide in oil prices should be utilised by the government to deregulate the industry and privatise the four government refineries.

The association, in a statement   by its Director-General, NECA, Mr. Olusegun Oshinowo, added,  “It is a common thing for government to weigh economic imperatives against political exigencies in moments of political engagement and political process as we are currently experiencing. Government is more likely to accord priority to political exigencies while relegating economic imperatives to the background, particularly if the fallout of the economic imperatives will undermine public perception of the government.

“The issue, however, is that the government is not faced with that choice under the current circumstance as the economy stands to gain from the deregulation policy. We, therefore, call on the government to do the needful by coming out boldly and courageously to inform the Nigerian populace that it has deregulated the downstream sector of the oil and gas industry.”

Shortly after they spoke, the PPPRA announced a reduction in the ex-depot price of petrol from N81.51 to N77.66 per litre.

The agency said the reduction became necessary following the   reduction in the pump price of fuel.

The agency, in a statement, said, “Consequent upon this (government’s) announcement, the PPPRA, in exercise of its mandate of determining the pricing policy and setting benchmark prices of petroleum products, hereby further announces the new ex-depot price of PMS as N77.66 per litre.

“In view of the foregoing, oil marketers are hereby advised to adhere strictly to this new price regime, as the PPPRA, in conjunction with the Department of Petroleum Resources shall enforce compliance in order to ensure that consumers benefit fully from this new review. In other words, any violation of the prevailing price regime, shall attract appropriate sanctions.

“It is therefore our wish to advise Nigerians against any form of panic-buying, as there are enough products in all depots across the country. We also wish to assure Nigerians that the PPPRA, in exercise of its mandate, is fully committed to ensuring adequate supply and distribution of petroleum products.”

Meanwhile, most major and independent marketers of petrol did not adjust their pumps to reflect the new price regime.

From Lagos to the Federal Capital Territory, Oyo to Ekiti, and Cross River to Plateau states, motorists were told by fuel station attendants that   they were either waiting for an “official order from   appropriate quarters” or wanted   to sell off their old stock first.

In President Goodluck Jonathan’s home state, Bayelsa; Akwa Ibom and Cross River states, the product sold for between N100 and N105 in most filling stations.

When one of our correspondents visited Mobil Filling Station at Gbagada Lagos, around 2 pm,   an officer of the Nigeria Security and Civil Defence Corps,   Ajaja, H. O,   was seen   insisting   that petrol should be sold at N87 per litre. But the station attendants said they had not been given the directive by their head office to change the price.

At Capital Oil Mega Filling Station on the Lagos-Ibadan Expressway, one of the   attendants said   they did not change their price because they were still selling their old stock.

The same reasons were given by officials of the two Oando filling stations on the Lagos Ibadan Expressway.

When contacted on the telephone, the   Chairman, Nigeria Union of Petroleum and Natural Gas Workers, Lagos Zone, Tokunbo Korodo, said that compliance level might not be total in the interim.

According to him, marketers were of the view that they should have been informed by the government before making the reduction public.

“If government wants marketers to switch to the new price with immediate effect, there should be some provisions for marketers who would make loses by doing so,” he said.

The Executive Secretary, Major Oil Marketers Association of Nigeria, Femi Olawore, told one of our correspondents that his members met with the PPPRA on Monday to chart the path forward.

He, however, said the full position of the association on the new price would be made public on Tuesday (today).

Before 6pm on Monday, some filling stations in the FCT    did not sell   petrol at   N87 per litre   as they explained that they had yet to exhaust their old stock. But a few, especially those in the city centre, sold   at the new price of N87.

When   asked why the price had yet to be reduced by N10 as announced by the government, a senior official of an   NNPC Mega Station in Abuja said, “we still have a lot of old stock.”

The official, who pleaded not to be named as he was not authorised to speak on the matter, added, “the price will come down by tomorrow (Tuesday). You should not expect it to fall immediately.”

Both Conoil and Total filling stations opposite the headquarters of the NNPC in Abuja however   sold at the new price of N87 per litre.

When contacted, an official in the Media Unit of the Department of Petroleum Resources, said that enforcement officers had been sent out to monitor petrol stations in the FCT.

He said, “It is not surprising that some of them (filling stations) have yet to comply. But they will have themselves to blame if our enforcement officers get them because various teams have been deployed to monitor compliance by marketers.”

In Bayelsa State, a visit to some filling stations in Yenagoa   revealed that apart from the NNPC mega   stations, others   sold a litre of petrol above N100.

At Jovero filling station on Isaac Adaka Boro Expressway, fuel was still being sold for N105 per litre.

A motorist, who gave his name only as Preye, said he confronted the fuel attendants   but   was told that that was what they had been selling.

When our correspondent in the state enquired from an attendant, he said they had yet to get instruction from their boss on the new price.

At Ereboter Filling station on Swali Road, motorists paid N105 per litre even though the   price on the dispensers read   N97 .

At Atlanta Oil and Gas at Amarata on Yenagoa-Mbiama Road, the price was the same.

Like Bayelsa, some filling stations in Uyo, Akwa Ibom State, were seen selling petrol at N105, N100, and N97. Such stations are Dan Dollars Oil Nigeria Limited, N97; Entaco N100, and Bruce Integrated, N105.

Many, such as       Ekpo Ekpo Integrated Ventures Limited, along Atiku Abubakar Road, Uyo,   shut down their operation.

GWT Mega Station also along the same road, Uyo only dispensed the product with two   out of its 12 nozzles.

A manager at Ekpo Ekpo Integrated Ventures, who refused to disclose his name, said they were   waiting for fresh supply.

The only filling station in the city that had reverted to the current price was the NNPC Mega Station along Ikot Ekpene Road.

In Cross River State,   the product sold for N97 in   stations operated by major marketers and as high as N110 in others managed by independent dealers.

An attendant, who spoke on condition of anonymity at the MRS Filling Station along Mayne Avenue in Calabar, said they would maintain the status quo until   their old product was exhausted.

When contacted, the state chairman of the Independent Petroleum Marketers Association, Effiong Udoh, said marketers could not afford to start selling at N87 at the moment.

“Most of these marketers got loans to buy the product at N97, where do you expect them to get the difference when the Federal Government is not giving us any form of subsidy?” he asked.

Pump price also remained unchanged in Jos as attendants claimed that they had yet to be briefed on the decision by the Federal Government.

A manager at one of the stations, who gave his name simply as Andrew, said, “We are yet to get any directive from the marketer on what to do. We are still waiting. But who will mitigate the cost we will incur since we still have old stock.

Most filing stations in Osogbo, Osun State also did not adjust their meters to reflect the new pump price of N87 .

An official of one of the   stations   along Odi Olowo Street, Osogbo, however said that     they would soon begin to sell at the new price.

However, the NNPC mega station along Ring Road in the city sold a litre of petrol for N87.

In Umuahia, Abia State , many stations sold for N100 per litre. Some others did not open for business.

The reduction   was however greeted with a high level of compliance by most stations in Benin,   Edo State.

Among the petrol stations that were seen selling at the new price were the Nigerian National Petroleum Corporation mega filling station along Sapele Road, Zeeko Oil and Total along Akpakpava Road.

But the Edo State Petroleum Monitoring Committee sealed off one of the Oando stations in the state capital for failing to comply with the new pump price.

Reduction not because of elections –PDP

The Peoples Democratic Party has however said the reduction in the price of petrol is not an attempt by it to woo voters.

Its   National Publicity Secretary, Chief Olisa Metuh, told journalists in Abuja on Monday that the Federal Government had in 2007 taken a similar action.

Metuh said,   “This is not the first time that we have had   decrease in the cost of petrol in this country. You will recall that when the late President Umaru Yar’Adua was in office, he reduced the pump price from N75 to N66.   That was not politics. He did it in June 2007. And there was no election.

“In this particular instance, it has nothing to do with the election.”

APC says slash is deceitful, belated

But the opposition All Progressives Congress described the reduction as a show of deceit and a belated effort.

The party said while governments of countries which are not as economically endowed as Nigeria reduced the pump price of petrol early this month, Nigeria, was just announcing a price slash that is far below what is obtainable in other oil producing countries.

It said in a statement by its National Publicity Secretary,   Lai Mohammed,   that a 10.3 per cent slash   was “a mere tokenism at a time the price of crude oil has crashed by about 60 per cent.”

The party said the pump price of a litre of petrol should not be more than N70. It added that at N87   per litre, the Federal Government was forcing Nigerians to subsidise the massive corruption in the oil sector by N17   for every litre of petrol.




– The Punch

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