The increase in fuel price

ON Wednesday September 2, the Petroleum Products Marketing Company (PPMC) announced a new ex-depot price of N151.56 for premium motor spirit (PMS), otherwise known as petrol. This is an increase of 14 per cent from the previous N138 price. Ex-depot price is the price marketers buy products from depot owners. An increase or decrease in ex-depot price has direct effect on the pump price of petrol. The increase announced on September 2 effectively raised the pump rice of PMS at the filling stations to N162 per litre or more.

This increment has received sharp criticisms from many citizens who are already suffering from the adverse effects of the Covid-19 pandemic and the consequent lockdown of the economy. Many have considered the increment as a mark of the insensitivity of the government to the plight of Nigerians. The Nigeria Labour Congress (NLC) has rejected the new increase, accusing the Federal Government of taking Nigerians for granted. According to Comrade Ayuba Wabba, “Nigerians and even the NLC are in a shock, and this increase is coming at a time when many Nigerians are passing through very peculiar and precarious times. The increase in price of petroleum has happened now more than three times in three months. Only yesterday, they hiked the tariff of electricity. And to compound it, they also reduced the interest rate of savings, which affects mostly the poor and the vulnerable”.

In the days and weeks to come, it is likely that the NLC and its sister organisations will call their members to protest the increment.  Meanwhile, demonstrations organised by the Coalition for Civil Societies had kicked off from Freedom Park in the Osun state capital Osogbo, where the protesters condemned the increase in electricity and petrol prices as the “highest level of insensitivity and wickedness from the President Muhammad Buhari-led All Progressives Congress government.” As the NLC president has noted, petrol prices have increased for three consecutive months, rising from slightly over N121 per litre in June to over N143 in July, N150  in August, and N162 in September.

These fluctuations in the price of fuel are the result of the enforcement of the policy of deregulation of the downstream sector of the petroleum industry. According to the Minister of State for Petroleum Resources, Timipre Sylva, the Federal Government is no longer fixing the pump price of petroleum products in the country. The price of PMS is now being determined by market forces.  There has been a consensus among stakeholders that the deregulation of the sector has become imperative for the economy. The focus of government is not to fix prices but to protect “the interest of the consumers and making sure that marketers are not profiteering,” he assured.

Similarly, Vice President Yemi Osinbajo, during the First Year Ministerial Performance Review Retreat held at the Conference Centre of the State House, Abuja attributed the hike in price of PMS to the Covid-19 pandemic which had adversely affected the economy. The Covid-19 economic realities have compelled the government to make some necessary far-reaching adjustments for long-term gains with some initial pain. He maintained that the government could not fund the subsidy regime that was previously in use. Government fixing or subsidising of PMS prices, he insisted, is costly. A subsidy regime, he averred, would come with the potential return of fuel queues as there had been no provision for fuel subsidy in the revised 2020 budget.  He assured citizens that the government was determined to remain alert to its responsibilities by preventing marketers from raising prices arbitrarily or exploiting the situation.

Nigerians are livid that this hike is coming at a time when life has become increasingly inconvenient with the threat posed to livelihoods by the Covid-19 pandemic and the lock-down imposed to slow down its spread. They think that augmenting the prices of fuel to ease the inflation and rise in the cost of living that are bound to follow these increases should be ameliorated by the government. The way and manner the increase was announced without a clear palliative to ameliorate its effect was clearly insensitive and failed to consider the harsh circumstances of life under the Covid-19 season.

We call on the government to rethink the situation and find ways and means to ease the harsh realities of life in the country. The government must listen to the voices of organised groups and individuals calling for a reversal of the hike in the price of PMS. It should negotiate and deliberate with these groups to consider alternatives and reach a compromise to avoid conflict that would further derail the economy.


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