The Federal government yesterday increased the price of Premium Motor Spirit (PMS) otherwise known as petrol from N65 to N75 per litre. The prices of other products such as the Automative Gas Oil (AGO) or diesel and household kerosene are however not affected as government maintained that the two products have been fully deregulated.
Most of the petrol stations visited within Lagos metropolis and Ibadan in Oyo State sold PMS at N75 a litre and their pump already adjusted accordingly.
There are strong indications that before the end of next month, Alhaji Umar Musa Yar Adua would announce a further decrease in the subsidy from the new level of N20 per litre. The Guardian sources that gave this hint said the action is to enable new investors in the refinery to recoup their money.
The sources added that the pronouncement by the incoming government would also enhance confidence in the international community to invest in the downstream refining sector.
” The ultimate objective is to deregulate the market just like what we have in the diesel and kerosene market today, one of the sources said.
Government sold the Port Harcourt refinery to Bluewaters Consortium about two weeks ago. This company is made up of Dangote Group, Rivers State government, Transcorp and Zenon Oil petroleum.
A station attendant in Ibadan told The Guardian that the directive on the new price tag came in the early hours of yesterday as all sales on Saturday were at the old price of N65 per litre.
“We sold to motorists at N65 a litre yesterday, we wanted to start with the same price this morning (yesterday), when our men came to us and said the price has been increased by N10 bringing it to N75 a litre,” the attendant stated.
In Lagos, all the filling stations visited by The Guardian including the majors, like Mobil, Total, Texaco, Conoil, African Petroleum-and the Independent operators have all adjusted their pumps to reflect the new price.
When contacted, the Executive Secretary of Petroleum Products Pricing Regulatory Agency (PPPRA) Dr. Oluwole Oluleye told The Guardian that government decision was informed by the dwindling of the Petroleum Support Fund (PSF) aimed at cushioning the effect of subsidy,
Oluleye said that in 2005, the agency spent about N150 billion to subsidise fuel adding that due to unfavourable price of crude in the international market the agency requested for additional fund of N100 billion for the same purpose.
In 2007 he said the agency is going to use N100 billion but that considering the development in the international oil market, prices have gone up and the subsidy which government now expend on domestic fuel is N30 per litre.
“So what the government has done is to share the burden between it and the consuming public by putting N10 on top of what the consumer will now pay while the government will bear the balance of N20 as subsidy still on PMS” he stated.
The crisis in the Niger Delta and Iran, he said were largely responsible for the increasing price of crude oil which is related to the price of refined petroleum products.
He, however, stated that the price of domestic PMS could still come down if the vagaries that heightened crude oil price in the international market such as Niger Delta crisis, instability in the Middle East, among others, disappear.
Sources at the Nigerian National Petroleum Corporation (NNPC), told The Guardian yesterday that its subsidiary, Pipeline and Products Marketing Company PPMC, has jacked up ex-depot price for PMS from N56.71 to N66.71 to reflect the new change in price.
In most of the filling stations, AGO went for between N93 and N96 per litre while household kerosene sold for between N73 and N76 per litre.
In January 2006, President Olusegun Obasanjo directed that there should be no fuel price increase until 2007.
However, reacting to the increase, the General Secretary of the Nigeria Labour Congress (NLC), John Odah, told The Guardian on phone last night that the parting gift Obasanjo is giving Nigerians on the eve of his departure embodies what he Obasanjo stands for in his eight years rule.
He said: “If this is what Obasanjo is giving Nigerians it is alright but for us in the labour movement, that embodies what he has stood for in his eight years rule. He actually wants to create problems for the coming government. Otherwise, how can one rationalise this kind of action?” Odah queried.
However, the NLC scribe urged the President-elect to revert the price mark as that singular decision will depict Yar’Adua as a man that is after the improvement of the hitherto battered Nigerian masses who have had no respite in the eight years of President Obasanjo’s reign.
Again, he stated: “We unequivocally call on the President-elect to reverse the price increase to the status quo because that is the only step that will show that his regime is not coming to inflict more pains on helpless Nigerians.”
Odah also reiterated the Congress’ resolve to reject the price adjustment as is with our tradition. “We will resist the price increase as that will only show the tradition that we are known for. The highest organ of the NLC will meet soonest to take a common stand on how to revert the increase should those that are supposed to revert it do not do it. We will start consultation immediately.”
Odah also accused Obasanjo of enriching a few Nigerians through fuel importation, refusal to add value to the crude oil through building more refineries and making the old ones work and generally price petroleum products out of the reach of ordinary Nigerians.
The Action Congress (AC) has also described as cowardly and vindictive, the increase in fuel prices by the outgoing administration of Obasanjo, saying it is nothing short of a deadly parting gift to a long suffering people.
“To cap these past eight years of bad governance, policy flip flops and wasteful spending, this administration has inflicted on the citizenry another hardship in the twilight of its existence,” AC said in a statement issued in Abuja yesterday by its National Publicity Secretary, Alhaji Lai Mohammed.
“Perhaps it is Obasanjo’s way of punishing Nigerians for opposing his quest for an unconstitutional third term, especially when seen against the recent similar hike in VAT from five per cent to ten per cent,” the party said.
The party wondered why Obasanjo did not publicly announce and justify the increase if he was sure it was the right thing to do.
AC declared that no administration in the country’s history had ever increased fuel prices more frequently a total of eight times than the Obasanjo administration.
It described as unfortunate the fact that the Obasanjo administration continued to import fuel for domestic consumption, while “the nation’s four refineries were left to rot so they can then be easily disposed of to his cronies at give-away prices as has been done with the Port Harcourt refinery.”