By Seyi Odewale (Lagos), David Lawani, and Deborah Onyofufeke (Abuja)
Like a phoenix, the fuel subsidy withdrawal palaver came up yesterday with yet another jerk up in the price of the Premium Motor Spirit (PMS), otherwise known as petrol.
This came just when the dust raised by the May 29 announcement of fuel subsidy withdrawal by President Bola Tinubu at his inauguration as the 16th President of the most populous democracy, was yet to settle.
Barely a few hours after Tinubu announced the subsidy withdrawal on PMS, the pump price of petrol soared from N185 to about N488 or more, depending on the localities.
*NNPCL gives reason for action
The Managing Director of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, while giving the reason for the increase in the price yesterday, said it has nothing to do with supply issues, adding that there is a robust supply of the product in the country.
He, however, said: “I don’t have the details at this moment. You know we have the marketing wing of the company; they adjust prices depending on the market realities.”
He added, “And this is the meaning of making sure that the market regulates itself so that prices will go up and sometimes they will come down also and this is really what we are seeing in reality this is how the market works.
“There is no supply issue completely when you go to the market you buy the product you come to the market and sell it at the prevailing market price there is nothing to do with supply, we don’t have supply issues.
“There is robust supply, we have over 32 days’ supply in the country, that’s not a problem. What I know is that the market forces will regulate the market, prices will go down sometimes and sometimes it will go up, but supply will be stable.”
He assured Nigerians that the policy was the best way for going forward.
“And I am also assuring Nigerians that this is the best way to go forward so that we can adjust prices when the market comes. I know that some companies have imported petroleum PMS, so many of them are online. Market forces have started to play, people have confidence in the market, and private sector people are now importing products. And there is no way they can recover their cost if they cannot take market reflective cost,” Kyari said.
Also, the Chief Executive Officer of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Alhaji, Farouk Ahmed, said the authority does not set the price of the product, but the market determines itself.
“As a regulator, you know I told you back in May we are not going to be setting prices; the market will determine itself and as you saw back in early June when prices came out it was based on the cost of importation plus other logistics of distribution and of course the profit margin by the importer.
“This market is deregulated and is open to all participants. As mentioned also yesterday (Monday) when I was in Lagos, we have about 56 marketing companies that have applied for and obtained licenses to import.
“Out of those 10 of them have indicated to supply within the third quarter which is July, August, and September. And out of those already, we received some cargoes from some of these marketers,” he said.
He added, “Prudent Energy, AYM Shafa, and Emadeb Cargo are arriving tomorrow (today), So, this is like just an encouragement to see that the market is liberated, and everyone is free to import so long you are working within the framework, especially in terms of quality.”
He insisted that the authority as a regulator would not put a cap on the price because it was not part of those importing the product.
“But the pricing as a regulator we are not going to put the cap on the price because we are not part of those importing, we are not a marketing company, we are just a regulator,” he said.
The National Operations Controller of the Independent Marketers Association of Nigeria (IPMAN), Mr Mike Osatuyi, also yesterday gave reasons for the hike.
According to him, the increase in crude oil prices in the international market majorly contributed to the increase in the price of petrol.
He said the Brent crude benchmark price had surpassed $80 per barrel for the first time since May 2023.
“This is a sign that supply is gradually tightening, and demand is expanding. This happened after Saudi Arabia agreed to cut its output to firm up oil prices, reflecting a one million barrels reduction per day from June.
“Also, the increase in the dollar to naira exchange led to the increase in fuel price making it to be sold at N617 per litre. The exchange rate between the naira and the dollar closed at N795.28/$1 at the official Investor and exporters’ window. This, he said, was established after the order by President Tinubu that there should be a unified exchange rate.
*Groaning civil servants say economy has gone worst, we can’t afford to go to work anymore
Predictably, reactions have begun to trail yesterday’s increase, which many termed as unreasonable and callous. To them, the parlous state of the economy, the galloping inflation that is holding Nigerians by the jugular, and the further increase in the price of fuel were considered one blow too many.
Across the land, both the rich and the poor; the elites and the illiterates appeared unanimous in their reactions to yet another jerking up of the price of petrol. To them, it was shocking as it made fuel dealers add more pain to the already terrible state the economy had put them in.
For instance, motorists and commuters in Ibadan, in the southwest zone of the country, expressed shock over the new pump prices of Premium Motor Spirit (PMS).
A move around the Ibadan metropolis showed that immediately after the news of the fuel price increase filtered out, some filling stations hurriedly closed shop, with an excuse that they were awaiting further directives from the authorities.
A few stations that were selling the product witnessed long queues of vehicles, with the pump price going between N560 and N650 per litre.
A motorist, Anu Alani, said how shocked he was when he woke up yesterday to see that many filling stations were not open for business and that selling have increased their price to N650 per litre.
“I was thinking that when I go farther, I would see where I could buy fuel at the normal price, but I didn’t. I don’t know what to do again as the economic situation is already bad,” he said.
Another person, Mrs Ayoola Olaoba, said she would have to look for means of leaving the country, as things do not look like they will get better soon.
“I bought fuel some days ago at N520 only for me to see some of my colleagues saying it has increased to N620. I said just like that! I do not think I can continue with the uncertainty trailing the present economic situation,” she said.
A commercial motorist, Mr Gbenga Oriowo, said the new price would have an attendant effect on transport fares. “I am still in the queue now and there is little or no probability that I will get fuel, and even if I get it, I cannot but increase the transport fare. We will all have to bear the situation,” he said.
Also in Abuja, the PMS increased from N537 to N617 per litre. In some petrol situations in Maitama, Wuse, Gwarimpa, Jabi, Wuye, and Kubwa areas of Abuja there were long queues where some were still selling at the old price.
Most stations have adjusted their pump prices to N617 to N620 but AA Rano, and NIPCO in Jabi are still selling the old price and some other places.
Also, the Nigerian National Petroleum Company Limited (NNPCL) station was seen selling at the new price. A customer, Mr Emma Uzor, who confirmed this development, said it was a terrible situation. “We are still battling with the new price and within two months they will increase it again, this is not fair to the masses. No information or reasons for the increment, how do they want the poor masses to survive? The salaries have not been increased and food prices have risen.
“The government should go back to their drawing board and come up with a favourable conclusion from the citizens,” Uzor said.
Speaking to newsmen on the development, the Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Abuja-Suleja zone, Mohammed Shuaibu, said even though other marketers are gradually importing the commodity, the NNPCL remained the major importer of the product into the country presently.
A civil servant, John Ochojila, lamented that things have dived to the worst. “Honestly speaking, Nigeria don spoil. You know we heard some rumours making the rounds last month that fuel price was going to increase to N700, but it was quickly discarded as false, now look at it. As soon as I heard about the increment, I called my friend, who works at a fuel station to ask him to keep some fuel for me if they were still selling at the old price, but he told me their price for now is N675 not even N617,” he said.
He added, “Is that not N700? Has Nigeria not spoiled like this? What is left other than to lock ourselves up at home and not go out again if that is possible?
“I feel like it can no longer get worse than this because we are at the lowest and the hardship is biting. No amount of salary increment, or palliative can cushion this. This is getting too much for the average Nigerian now. Imagine what will happen to the poor. I have a car, but I don’t drive every day anymore because of the fuel price.”
However, another resident of Abuja, Kolawale Ayodeji, expressed hope and optimism in the country saying he believed things may seem bad now, adding that they have to go this turn before they get better.
He said, “N617 is a lot, I won’t lie but we have heard that other countries sell higher as Nigeria was previously selling lower than she was supposed to. I believe it will get better. Things must look bad first before it gets better because we were deeply in bad governance before now. I, for one, like to hold hope for the best. Maybe in a year, everything will normalise, and this period will make sense. I hope so.”
