The confusion trailing President Bola Ahmed Tinubu’s declaration on subsidy removal took another turn Wednesday with the Nigerian National Petrol Company Limited (NNPCL) announcing a range of new pump prices of Premium Motor Spirit(PMS), otherwise called petroleum across the country.
A new price template released by NNPCL revealed that while the PMS sells in Borno state at N557 per litre, it goes for N488 in Lagos, N537 in Abuja, N520 in Enugu, sells for N500 Ekiti and goes for N515 in Ilorin.
In his inaugural speech Monday, Tinubu had declared: “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.
“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.”
Blueprint had reported that less than 24 hours after the declaration, marketers adjusted their pump prices to between N500 and N700 per litre across the country even ahead of the NNPCL decision to announce the new pump fares.
Also, transporters jumped at the opportunity to hike their fares by over 200 per cent in various parts of the country, including Sokoto, Ilorin, Port Harcourt, Enugu, Awka, Lafia and Kano among several others.
But Nigerians have expressed their angst over Tinubu’s decision to “do the right thing at the wrong time.”
A cross section of respondents who spoke to Blueprint expressed dismay that the promise by the Muhammadu Buhari administration to end subsidy by June 2023 in compliance with the Petroleum Industry Act (PIA), subsists and would have been allowed to run its full course till the end of June.
They recalled the immediate past minister of finance, budget and national planning, Zainab Ahmed, was quoted as having assured Nigerians that N3.36trillion subsidy budget was proposed to cover first six months of 2023 (January to June).
What Buhari government said
Speaking at a media briefing at the close of the 28th Nigerian Economic Summit (NES#28), themed, “2023 and Beyond: Priorities for Shared Prosperity,” May 2022, Ahmed had described fuel subsidy as a double jeopardy for the Nigerian economy, which must be removed.
She had said: “The 2023 Fiscal Framework and Appropriation Act as well as the Petroleum Industry Act (PIA) have made the provision that government should exit fuel subsidy by June 2023. The committee is to work out a road map for the removal of the subsidy. No change in the overall policy direction regarding the petrol subsidy is envisaged by June 2023.”
New price regime
Jettisoning the plan however, the NNPCL announced a range of pump prices which vary from one part of the country to the other.
In a statement signed by its NNPCL Chief Corporate Communications Officer Garba Deen Muhammad in Abuja Wednesday, the national oil company explained that the adjusted pump price was in line with “current market realities.”
Although the NNPCL, Tuesday, admitted there was a budget proposal to that effect, but that there was no money to further fund the subsidy till the end of June.
Explaining the latest decision, Mohammed said the NNPCL said the new pump prices of PMS across its retail outlets were in line with current market realities.
“As we strive to provide you with the quality service for which we are known, it is pertinent to note that prices will continue to fluctuate to reflect market dynamics.
“We assure you that NNPC Limited is committed to ensuring a ceaseless supply of products.
“The company sincerely regrets any inconvenience this development may have caused.
“We greatly appreciate your continued patronage, support, and understanding during this time of change and growth,” the statement reads.
Nigerians query
Querying the federal government’s rational in taking the decision, a cross section of Nigerians who spoke to Blueprint said the new administration was hitting the ground running the wrong way.
An Abuja-based civil servant who simply gave his name as Bayo said: “The new administration should not take us for a ride. Yes, we have a new president, but he must tread softly. We are not unaware that the fuel subsidy of a thing is a fraud, but the fact remains that since government is a continuum, it behoves on the new government to allow the subsidy of a thing to run its full course till June. You recall there was a budget proposal to that effect.”
Raising similar concern, an Abuja resident, Grace Okechukwu, urged the new government not to play on the intelligence of Nigerians.
She said: “It is odd, to say it mildly. Asiwaju Tinubu should not fritter the little goodwill he enjoys among Nigerians. My sister, I must tell you that this man is being ill-advised. It has long being agreed that fuel subsidy is a sham, a fraud and a crime if you like. But what has become of the budget which the previous administration set out from January-June 2023? It is not just enough to tell us there is no money to fund the subsidy like Mele Kyari (NPCL GMD) told us yesterday. We are human beings and we deserve to be respected by our leaders. Allowing this to run till June ending won’t be taking anything off the government. This arrogant posture won’t lead the government anywhere.”
Also in another reaction, Mohammed, a law student at the Nigerian Law School, Bwari, Abuja, cautioned the government.
According to him, “Nigerians had suffered enough under the past administration and to start on this note won’t augur well for both the leaders and the led. For crying out loud, we had a subsidy budget, and suddenly the new president declare by fiat it was over. Meaning what? Yes, the argument that they would re-channel the money to other areas of our life is not enough reason to yank off this.
“Who knows what people are doing or did with the Jan-June N3.36trn subsidy budget that was to end this June? The consequence of that sudden and insensitive removal on the masses is obvious. N537 per litre fuel translates to a lot of economic hardship to Nigerians. Tinubu is doing the right thing in the wrong way. Nigerians can’t be taken for granted. The cost of living in Nigeria is nightmarish. The government can’t afford to put the cart before the horse.”
NLC warns
Meanwhile, the Nigeria Labour Congress (NLC) has asked federal government to direct the NNPCL to withdraw what they described as “vexatious Pricing template” to allow free flow of discussions between government and labour.
According to a statement signed by the president, Comrade Joe Ajaero, said the Congress is worried that the government, through the NNPCL, despite the ongoing meeting of stakeholders in the oil and gas sector to manage the unilateral announcement by the President to withdraw subsidy on petroleum products, went ahead this morning to announce a new regime of prices under a new pricing template.
Comrade Ajaero further said is an ambush and runs against the spirit and principles of Social Dialogue which remains the best platform available for the resolution of all the issues arising out of the petroleum Down-stream sector.
He said: “Government cannot in one breathe be talking about deregulation and at the same time fixing the prices of Petroleum products. This negates the spirit of allowing the operation of the free market unless the government has as usual usurped, captured or become Market forces.
It is therefore unacceptable and we seriously condemn it. Good faith negotiation is key to reaching agreement.
“What the government has done is like holding a gun to the head of Nigerian people and bring undue pressure on the leaders thus undermine the dialogue.
“We call on the federal government to immediately instruct the NNPC to withdraw this vexatious Pricing template to allow free flow of discussions by the parties.
“Nigerians would not accept any manipulations of any kind from any of the parties especially from the representatives of the Government.
“Our commitment to this process is buoyed on the fact that all the parties would be committed to ensuring that it is carried out within the ambits of liberty without undue pressure.
“”The release of that Template may not allow us to continue if nothing is done to withdraw it so that the dialogue can continue unhindered. It is clear that Government is actually trying to scuttle the process.
“As it stands, the federal government has become fixated on their chosen course of action. Would this help this dialogue? It clearly will not. There must be flexibility to allow concessions and reasonable accommodation that will produce the best result for Nigerian people. This is what we all seek at this time.”
Manufacturers back Tinubu
However, the Manufacturers Association of Nigeria (MAN) has joined the support for the removal of the fuel subsidy.
The umbrella body of the country’s industrialists while congratulating the new president said as an advocacy group, it look forward to a number of policy changes and decisions affirming the decision to expunge the controversial payments from the nation’s budget is commendable.
Director General MAN Segun Ajayi-Kadir however said Tinubu needed to give a marching order to move the Central Bank of Nigeria (CBN)towards a unified exchange rate as promised in his address, and also direct all ministries, departments, and agencies of government to unfailingly comply with Executive Order 003 on the patronage of made-in-Nigeria products.
Ajayi-Kadir said: “It is therefore highly commendable and an assurance of better days ahead to hear the President saying that his industrial policy will utilize the full range of fiscal measures to promote domestic manufacturing and lessen import dependency. For me, this is a positive development. It is an unmistakable indication of a far-sighted strategic choice.”
He affirmed that it is “one that is borne out of a deep reflection on the current inclement manufacturing environment and the need to stop the drift into inglorious de-industrialization of the Nigerian economy.
“What is most gratifying is that it came from Mr. President from day one. The issues of multiple and often times punitive taxation; conflicting and contradictory fiscal and monetary policy measures; skewed and poor management of the foreign exchange regime and the long overdue stoppage of the fuel subsidy were addressed in the President’s speech and I believe they resonate with manufacturers in particular and the business community in general.”
He said “a marching order, so to say, is needed to move the Central Bank towards a unified exchange rate. I am glad that Mr. President was very clear on this. We also expect that, in line with his promise to enable a supportive fiscal policy regime, Mr. President will order a reversal of the unwarranted violation of the government’s three-year excise escalation roadmap on alcoholic beverages and tobacco.”
