Anger grows as govt defends petrol, power rates increase

The price of petrol at the pump jumped to between N162 and N164 per litre on Thursday following Wednesday’s hike in ex-depot price.

The Petroleum Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), announced N151.56 as ex-depot price. It sold for N138.63.

Also on September 1, the Electricity Distribution Companies (DisCos) commenced a new tariff regime, which raised electricity rates.

Both actions attracted outrage from Nigerians who are still reeling under the debilitating effect of the COVID-19 pandemic.

A NAN correspondent who monitored the sale of petrol in Ikeja, Agege, Maryland, Egbeda and Iyana Ipaja axis of Lagos State, observed that some major marketers were selling petrol at N161 per litre.

Some filling stations owned by Independent marketers dispensed the product at between N162 and N164 per litre, depending on their location.

A vehicle owner, Mr Victor Olaniyi, told NAN that the increment caught him unawares and left him frustrated.

He said: “I usually fill my tank once a week and I was supposed to fill it on Tuesday but I was unable to and I had to buy fuel at N162 today.

“I believe the increment is high, because last week, I bought fuel at N148 per litre. Government should please look into this because it will affect everybody”.

Another motorist, Mr Taiwo Balogun, said as a private cab operator, he increased his fares to meet with realities in the country.

He said he usually picked people from Ikeja to G.R.A for N150 but increased the fare to N200 per passenger due to the new price.

The Nigeria Labour Congress (NLC), the Trade Union Congress and other labour groups have condemned the new regime of electricity and power rates.

Chairman, Senate Committee on Sports, Obinna Ogba, said the increases in electricity tariff and fuel price at a time the economy was yet to recover from the effects of COVID-19, showed that government is highly insensitive.

Ogba said: “The country and indeed the whole World is facing serious problem right now because of the Coronavirus pandemic. Therefore, these increases are not good at all.

“The government is just showing insensitivity to the plight of Nigerians because by increasing the pump price of petrol and electricity tariff, the suffering of the people will become worse. The whole thing is not funny at all.

“You cannot put the blame on the agencies because there is no way any of the agencies can increase the price of its commodity or service without first getting directive from the leadership of the country.”

ActionAid Nigeria also condemned the increase in fuel price.

Country director of the organisation, Ms Ene Obi, in a statement said: “We are not out of COVID-19, a lot of citizens are losing their jobs , people are getting poorer, more responsibility with school closure, young people roaming the streets unemployed and fuel hike at this time is shocking.

“Governance is about the people, instead of dealing with insecurity, we are taking actions that will further heighten insecurity because as the inflations go up and more people are plunged into poverty, there will be more conflict in our society.

“With the volume of energy we have in the country, it is disappointing that we are still not refining crude locally.”

Senate may reconvene

It was learnt yesterday that the Senate may reconvene from it recess to discuss the development and take a position.

However, this cannot be confirmed by Chairman of Senate Committee of Media and Publicity, Senator Ajibola Basiru.

He said: “I’m currently in Imo State for an APC assignment. I’m out of touch. I can’t confirm whether or not an emergency sitting will be called by the Senate since I’m not in town.

“The President of the Senate called me a while ago. I’m not sure what he wanted to discuss with me. It may have been related to that. But I can’t tell. The Senate committee chairman on Rules and Business can confirm that.”

The government defended the new petrol pump price and the hike in electricity tariffs as “inevitable”.

Minister of State for Petroleum Resources Timipre Sylva said market forces determine prices of petroleum products, adding that government will continue to protect the consumers.

He said: “Government is no longer in the business of fixing prices for petroleum products, we have stepped back.

“Our focus now is on protecting the interest of the consumers and making sure that marketers are not profiteering”.

Alternative to petrol

According to him, the removal of subsidy had become unavoidable since the government could no longer sustain the over N1 trillion expenditure on under-recovery.

“So, we are now like umpires on the same side. We watch the price.

“We are also introducing a complaint box in the ministry of petroleum. If a marketer is raising prices beyond a certain rate, you report to us. We have become the police.

“Because our duty is to ensure the public is not cheated. We are now on the same side to police the marketers and retailers to ensure they do not profiteer from the public.”

Sylva said in the next few weeks government will pump out the Compressed Natural Gas (CNG) as alternative to petrol.

He advised Nigerians who cannot afford to buy petrol at the hiked pump price to use the alternatives that the Federal Government will provide.

“In the end, I do not think that people will even feel the increase because by the time you get used to gas to fuel your car at half the price of petrol, you probably won’t think of petrol anymore.

“Let us allow this policy to mature. These are just the teething problems. Down the line, Nigeria will be happier for it and this country will survive better economically” he said.

Sylva said it was unfortunate that people were blaming the government, noting that the deregulation of the sector was imperative for the economy.

He said it was also a consensus among stakeholders for such strong policy direction.

According to him, the well-being of Nigeria remains paramount to government.

“You all know that that President Muhammadu Buhari aligns with ordinary Nigerians, especially the poor.

“Left for him, he will never allow increase in pump price; for this to happen, it means that it is an inevitable decision.

“COVID-19 took the price of crude oil to zero zone,” the minister said.

He said that government cannot fund subsidy, hence would not adopt that as an option, noting that current happenings were for the economic survival of the country.

Sylva said the government had cut crude production from two million barrels to 1.412 million barrels per day.

This, he said, was affecting revenue generation.

Market forces at play

Ogun State Governor Dapo Abiodun also defended the hike in rates. Speaking at the Aso Villa after meeting with President Buhari, Abiodun said there was no way Nigerians would want both sectors to function normally without having to live with the realities of pricing and normal market factors.

He said the fuel price hike is market forces at play in a deregulated petroleum sector, explaining the the market forces had determined what just happened.

“First, you want to enjoy lower prices when the prices of crude are low and then not want to pay for a slight increase when there is an increase in price of crude. The price of crude is directly proportional to the price of refined products. So, I believe that is what is happening at the moment”, Abiodun, who is a player in the oil sector said.

On the electricity tariff, he argued that for the power sector to meet the demands for the population, it had to price its products appropriately to meet its costs of production.

“In terms of the tariff increase in the electricity industry, again, we also have to decide what we want to do.

“We all complain that we are not generating enough electricity and we all complain about the fact that we don’t have the right infrastructure to transmit electricity, we complain about the fact that the distribution companies do not seem to be efficient. The problem is because, perhaps, the pricing is not right.

“If you want people to invest in production of gas, in gas floatation, which our turbines and our power plants rely on, we must ensure that the entire value chain is profitable. Because if one part of it is not profitable, that means there will be a short fall in one of the value chains, if we don’t have enough investment.

“So, if you don’t have enough investment in gas gathering, if we don’t have enough investment in gas transportation, we will not have enough gas supply to sustain the quantum of generation we require as a government or as a nation. And when we don’t have that, we don’t have enough that will be transmitted to our homes and the transmission grid, and then, we continue to complain.

“So, really the truth is that it’s a cache 22 situation. I’m sure the NERC is doing everything in its power as the regulator. But truly, we must begin to pay what we need to pay so that we can have the right amount of investment in the entire value chain of the electricity industry”.

Speaking on President Buhari, Abiodun said “let me first say to you that Mr President is so meticulous. He is so methodical. He is extremely organised. And at any point in time any governor wants to see the President, all you have to do is to ask him. And the President will give you audience. He will give audience and he will take note.

“For those of us that know the President, he is someone who believes in constituted authority. When a governor says these are my problems, the President takes it to heart and he follows through the details. One cannot ask for a better captain of our ship. That is what I have seen in Mr President and that is what I probably think most people will not know because Mr President is not a man of many words”, he said.