Again, NNPC Raises Petrol Pump Price In Two Months, As Queues Resurface In Lagos, Abuja, Ogun

By Seun Ibiyemi

Following the further increase in the petrol pump price by the Nigerian National Petroleum Company Limited (NNPCL), stakeholders have decried the increase, describing it as “ill-timed and insensitive” to Nigeria’s prevailing economic challenges.

This is even fuel queues resurface within Lagos, Ogun environment.

Many filling stations, including those along Ikorodu Road, Ikeja and Bariga, have temporarily closed due to the price hike.

The pump price at NNPCL stations had risen  to N998 per litre, while other marketers were charging even more.

Northwest filling stations are now selling at N1,000, Hyden Petroleum at N1,100 and NIPCO at N1,050.

Nigerian National Petroleum Company (NNPC) and other marketers on Wednesday increased the price of petrol by 16 percent, the third increase in two months and weeks after it started purchasing the petrol from the giant Dangote oil refinery on the outskirts of Lagos.

On Wednesday, NNPC increased petrol prices from N950/litre to N998/litre in Lagos and as high as N1,003 in northeastern states.

The deregulation means that marketers are now free to determine their own prices without government interference.

This is expected to lead to increased competition and improved efficiency in the sector. However, it also means that consumers could face significant price fluctuations.

This adjustment follows reports of a potential price hike due to NNPCL’s withdrawal as an intermediary in the Dangote Refinery purchase deal.

…Petrol hike will further deepen poverty, jobs lost — NLC

Reacting, Nigeria Labour Congress (NLC) said that the latest increase in the pump price of petrol will further deepen poverty as production capacities dip.

The Congress added that the increase would lead to more jobs lost with multidimensional negative effects, and therefore, demanded its immediate reversal.

NLC position is contained in a statement signed by its President, Mr Joe Ajaero on Wednesday in Abuja, titled, “What next after increase in pump price?”

The labour leader said the previous increases had not produced any good result, rather, people only got poorer.

He said the Congress was dismayed by the latest increase in the pump price of petrol without commensurate capacity of Nigerians or mitigatory measures.

“Even following the logic of market forces , we find it an aberration that a private company (NNPCL) is the one fixing prices and projecting itself as a hegemonic monopoly.

“We challenge the government to go to the drawing board and present us with a blueprint for an inclusive economic growth and national development instead of this spasmodic ad hocism and palliative policy.

“It needs no stating the fact that the latest wave of increase has grossly altered the calculations of Nigerians once again at a time they were reluctantly coming to terms with their new realities,” he said.

…CPPE faults petrol price hike, says economy not ripe for full deregulation

Also, the Centre for the Promotion of Private Enterprise (CPPE) has decried the recent increase in petrol prices, describing it as “ill-timed and insensitive” to Nigeria’s prevailing economic challenges.

Chief Executive Officer (CEO) of CPPE, Muda Yusuf, spoke in a statement on Wednesday.

Speaking on the development, Yusuf said the federal government should consider social, economic, and political factors in policy decisions, rather than solely focusing on commercial interests.

The CPPE CEO said the price increase is regrettably ill-timed and does not reckon with the prevailing difficult economic conditions.

“It is important to stress that Social, economic and political considerations matter in policy choices.  Commercial considerations should not completely override these considerations,” he said.

The Nigerian economy is not ripe for full-blown deregulation and market principles on all fronts.

“The social cost of such policy choices is typically very high. This is an economy with very weak social safety nets. Over one hundred million people are wallowing in various variants of poverty.”

Yusuf said the country is also faced with the challenge of “policy sequencing.”

He said it would have been better for the government to implement the economic stabilisation bill before introducing the petrol hike.

“The present administration has presented an Economic Stabilisation Bill to the national assembly,” he said.

“The Bill is expected to bring some relief to the citizens and businesses. It would have been better to allow the proposed mitigating measures to be activated and gain traction before coming up with the petrol price hike.

“What the economy needs at this time are measures to ease the current economic and social challenges; not policies that would aggravate them.”

Yusuf also said it is now important for the government to urgently cut import duties and taxes by a minimum of 25 percent on all industrial raw materials.

He added that the customs duty exchange rate should be fixed at a maximum of N1000 per dollar to reduce the current prohibitive cost of imports.

“Relevant legislation should be amended to that effect. This is without prejudice to the fiscal policy measures contained in the Economic Stabilisation Plan,” Yusuf said.

“The government must be ready to trade off some revenue in the current situation.

“There is a need to seek to achieve the maximisation of welfare function for citizens and productivity function for businesses.”

Yusuf also stressed that the government should not be fixated on revenue maximisation.

Also, an energy lawyer, Dr Ayodele Oni suggested that the government could foster competition by promoting the establishment of modular refineries and revamping existing national facilities.

Oni, also a partner at Bloomfield Law Practice, said that increased competition among refiners could lead to better prices for consumers.

To stabilise exchange rate fluctuations, Oni recommended that the government partially defend the Naira with foreign exchange in the short term.

For the long term, he called for policies that encourage exports and foreign direct investment to boost dollar inflows.

Oni also advised diversifying the economy into manufacturing and agriculture to reduce import costs.

He proposed exploring alternative fuel sources such as Compressed Natural Gas (CNG) and suggested that citizens take advantage of government incentives for CNG vehicle conversion.

Oni, therefore, urged the government to introduce mass transit systems to reduce the impact of fuel price fluctuations on the populace.

According to him, Nigeria is now operating under a deregulated regime, where prices are influenced by market forces, including exchange rates.

He attributed the recent price increases largely to the rising dollar exchange rate against the Naira, as the petroleum sector operates in a dollarised market.

He expressed hope that the crude-for-Naira arrangement between NNPC and the Dangote Refinery would help stabilise the Naira against the dollar and alleviate pricing pressures.