“The unilateral increase in prices of petroleum products today by government represents the height of insensitivity and impunity and shall be resisted by the Nigeria Labour Congress and its civil society allies,” the congress said, through a statement by its General Secretary, Peter Ozo-Eson.
The statement added, “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.
“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.
“Further more, 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 communiques, 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.
“The allusion to the fact that the this increase was arrived at after due consultation with stake holders is not only ridiculous and fallacious, it goes to show that the brief meeting held today during which government was advised shelve the idea until at least it meets with the appropriate organs of the Congress was in bad faith.
“Accordingly, we urge the 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.
“Already an emergency NEC meeting has been scheduled for Friday, May 13, 2016 to decide on the next line of action. Meanwhile, our affiliates, state councils and civil society allies are requested to commence mobilization immediately.”
Why fuel price became necessary
Why labour is kicking, Petroleum Products Pricing Regulatory Agency (PPPRA) was explaining why the deregulation of the downstream sector and the hike in fuel price was inevitable.
Acting Executive Secretary of the agency, Sotonye Iyoyo, said the new price, which reflected a hike by about 67.6 per cent from the previous N86.50 per litre, was to help marketers overcome difficulties they were facing in fuel importation.
The N86.50 was the official fixed price by government under the now defunct subsidy regime.
Under the subsidy regime, the government paid the difference between the landing cost of fuel, including the marketers’ and distributors’ margins, and the fixed retail price to enable fuel to be sold at N86 per litre at NNPC-owned mega stations, and N86.50 per litre in other filling stations.
With the take-off of the deregulation policy, the federal government has formally removed subsidy from the PPPRA pricing template.
The Minister of State for Petroleum Resources, Ibe Kachikwu, who announced the policy change, said deregulation was introduced in order to increase and stabilize the supply of petroleum products in the country.
Mr. Kachikwu said any Nigerian entity with the right capacity was now free to import and market fuel in the country, subject to existing quality specifications and other guidelines issued by PPPRA.
“All oil marketers will be allowed to import PMS (premium motor spirit) on the basis of FOREX (foreign exchange) procured from secondary sources and accordingly PPPRA template will reflect this in the pricing of the product.
The PPPRA, the government agency responsible for moderating petroleum product pricing in the petroleum industry, explained that the review of the fuel price became necessary in view of the difficulties petroleum products marketers usually encounter in sourcing for FOREX.
“This review became imperative in the face of extreme difficulties faced by petroleum product importers in sourcing foreign exchange,” the executive secretary said in Abuja.
Mrs. Iyoyo, who also announced the second quarter price modulation framework, which debuted on January 1, 2016, said it was aimed at ensuring a ‘fit-for-all’ approach in the interest of the Nigerian consumers, marketers and the economy.
She said the new framework approved a new price band for PMS at a maximum of N145 per litre in other filling stations, while NNPC retail stations would sell at a lower price.
To meet the country’s consumption demand, the PPPRA official said fuel importers would henceforth be permitted to source for foreign exchange from secondary sources outside the Central Bank of Nigeria, CBN’s rate of N197 and N199 to the dollar.
Mrs. Iyoyo, who said the agency was conscious of the difficulties Nigerians were facing in the last few months, explained that the PPPRA would continue to modulate pricing in accordance with prevailing market dynamics to ensure fair value to all.
Meanwhile, shortly before the formal announcement, there were long queues at filling stations in Abuja and environs as anxious motorists tried frantically to buy fuel at the price of N86.50 pending when the filing stations would adjust their pumps to reflect the new price.
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