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NLC kicks against raise in fuel price, asks FG to revert to old pump price



Total Filling Station, just for Illustration



The Nigeria Labour Congress (NLC) on Thursday rejected the new fuel price announced by the Petroleum Products Price Regulatory Agency (PPPRA) on Wednesday.


The labour movement through its president, Ayuba Wabba, asked the federal government to immediately return to the old fuel price of N121.50 per litre.


The NLC was reacting to the announcement in Abuja by the Executive Secretary of the PPPRA, Saidu Abdulkadir, of a new “retail price band advisory” of N140.80 and N143.80 per litre for petrol for the month of July, 2020.


Mr Abdulkadir said the new price band replaces a similar band of N121.50 and N123.50 per litre announced by the agency for last month.


He said the price advisory was arrived at after a review of the prevailing crude oil market fundamentals for June, “taking into consideration the realistic operating costs by petroleum products marketers.”


‘New price illegal’
But, in its reaction, the NLC expressed shock at the new petrol pump price which imposes an additional 16.4 per cent cost burden on consumers of petroleum products over what they paid for a litre of petrol in the previous month.


The NLC President accused Mr Abdulkadir of arbitrariness and contempt, adding that the announcement was not approved by the Board of PPPRA and the Ministry of Petroleum Resources.


Describing the development as “deeply disturbing”, Mr Wabba highlighted some of the contradictions inherent in the latest announcement by the PPPRA.


Apart from the contradiction that the PPPRA was still regulating a deregulated product through ‘advisories’, Mr Wabba said the PPPRA’s argument about its regulatory role to protect the public interest was flawed.


Mr Wabba rejected the PPPRA’s argument that “the market-based fuel pricing policy would free the market of all encumbrances to investment and growth and encourage oil marketers to resume supply of petrol, create downstream oil industry value, foster job creation and ensure reasonable returns to investors”.


“When the statement by the PPPRA is juxtaposed with the recent killer electricity charges unveiled by the DISCOs (electricity distribution companies), Nigerians cannot help, but feel the heat of a potent threat to run millions of Nigerians under,” he said. “It is even worse that this is coming at a time when our people are living on the precipice of the COVID-19 pandemic.”


The NLC said Nigerian consumers have hardly enjoyed the economic benefits of the downward review of fuel prices before the latest price hike, as most of them remained indoors as a result of the coronavirus pandemic.


He said the average Nigerian was forced to interpret this action by the government as a grand mischief and deceit, considering that the latest hike in petrol price is being announced just as the lockdown has been eased out and inter-state travel ban lifted.


The NLC said it would continue to reject an arrangement where Nigerians are charged international rates for a product of which the country is the sixth largest producer in the world.


“The extra costs that the PPPRA wants Nigerians to pay in order to promote growth and investment are actually the cost of profits made by countries that we ship our crude oil to, the cost of sea freight of the refined products, the cost of demurrage at our seaports when the refined products arrive, the cost of frequent devaluation of our national currency, and the cost of official corruption by gatekeepers managing the downstream petroleum sub-sector,” the NLC said.




The NLC demanded the immediate reversal of the new price and a return to the old one since “the price of crude oil in the international market has only slightly increased.”


While renewing its call for a ‘national conversation’ on the management of the country’s oil assets, the NLC insists such must be in line with the provisions the constitution


Besides, the NLC called for the immediate rehabilitation of the country’s four oil refineries




The union’s reaction highlights some of the fears and contradictions observed by some concerned Nigerians when the Federal Government recently announced the introduction of the policy of deregulation of the downstream sector of the petroleum industry.


Civil society groups under the aegis of the Centre for Transparency Advocacy had asked the federal government to provide a detailed framework for the policy to avoid arbitrariness and confusion.


The groups said the framework was necessary to provide a legal basis for the policy and help define the roles and responsibilities of the different interest groups and agencies of government involved in the fuel supply and distribution process.


Besides, the groups said the framework would help ensure transparency and accountability in the decision-making process under the policy, particularly on the computation of the fuel pricing template by the PPPRA.


“We demand for a framework for the domestic utilisation of petroleum products to properly guide the process, as most Nigerians are unaware what the fuel subsidy regime idea is all about.


“We believe the framework will spell out the roles and the limit of the responsibilities for agencies like the Nigerian National Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR) and the Petroleum Products Pricing Regulatory Agency (PPPRA) to make the policy a reality,” the group said.


Also, in a recent interview, the Minister of State for Petroleum Resources, Timipreye Sylva, told PREMIUM TIMES the review is always carried out by a ‘special committee’ charged with the responsibility of monitoring the international crude oil and domestic fuel markets.


In considering a price advice to the PPPRA, the minister said the committee would consider the market fundamentals, “including cost of foreign exchange, bank interest rates by importers of petroleum products as well as other variables.”


He said the price is arrived at in collaboration of MOMAN (Major Oil Marketers Association of Nigeria), DAPPMAN (Depot and Petroleum Products Marketers Association of Nigeria), IPMAN (Independent Petroleum Marketers Association of Nigeria) “and all the players in the fuel market”.

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