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BREAKING: NLC Rejects New Petrol Price N1,030/Litre, Demands Reversal

The Nigeria Labour Congress (NLC) and the Organised Private Sector have called for the immediate reversal of the hike in the pump prices of Premium Motor Spirit, popularly called petrol price, by the Nigerian National Petroleum Company Limited.
Retail stations of NNPC raised the price of petrol to N1,030 from N897/litre in Abuja, and in Lagos, it was hiked to N998/litre from N868/litre. Other locations witnessed similar price hikes, triggering anger among Nigerians.
The price hike, the second in one month, represents about 14.8 per cent or N133 rise.
With the latest price adjustment, it means that in the less than 17 months of the current administration, the price of petrol has risen by over 430 per cent from May 29, when it took over the reins of power.
Last month, the national oil company raised the pump price of petrol to N897/litre from the official price of N617 per litre it hitherto sold in Abuja.
It came days after the NNPC said it was heavily constrained by the huge debt it owed international suppliers. The debt is estimated to be $6.8bn.
At the NNPCL mega station in Central Area, a customer told The PUNCH that the product was sold at N1,030.
The station did not display its prices on either the signboard or the pump meter, leaving customers unaware of the cost of fuel.
Instead, the new price was announced verbally by the fuel attendants, against best practices.
“I am very angry right now. I entered this station thinking their price would be better. It was only after I had wasted time in the queue that I was informed by the fuel attendant that the price had risen to N1,030,” the customer said.
This development comes days after the NNPC decided to terminate its exclusive purchase agreement with Dangote Refinery, giving room for other players downstream to buy products directly from the Dangote Refinery.
Oil marketers said NNPC’s withdrawal as the sole off-taker of petrol from the Dangote refinery meant the Federal Government had systematically stopped subsidy on petrol completely.
It also meant the product would be sold to marketers on a willing buyer, willing seller basis.
Efforts to reach the NNPCL proved abortive as its spokesman, Femi Soneye, didn’t respond to calls to his phone lines.
Meanwhile, drivers and transporters raised the cost of fares after the petrol price hike by NNPCL and other dealers.
One of our correspondents observed that a one-way trip from Lugbe to Wuse in Abuja had increased to N1,000 from N700 previously charged.
Also, transport costs moved as fuel prices hit N1,250 per litre in Borno State.
Commercial fuel stations sold at N1,100 per litre with many stations also shut down, which caused artificial scarcity of the commodity in Katsina State. The pump price in Ilorin, Kwara State, as of Wednesday evening at NNPC stations was N1,045. At Orange Global filling station it was N1,300; Rainoil dispensed at N1210, while Total sold it at N1,210.
In Edo, most marketers sold for N1,250 per litre, it was in Delta for between N1,100 and N1,200 per litre and N1,200 to N1,250 per litre in Benue.
In Abia, fuel sold for N1,200 and N1,300, while in Yobe, NNPC sold for N1,098 and others between N1,150 and N1,170 per litre
Most stations in Ondo sold for between N970 and N1000 in the morning but changed to N1,115 in the evening.
NLC, OPS kick against Petrol Price Hike
The Nigeria Labour Congress condemned the hike in petrol prices nationwide. The union also demanded an immediate reversal of the hike while accusing the government of only focusing on fuel price increments.
The NLC, in a statement signed by its president, Joe Ajaero, described the decision of the NNPCL as an aberration.
Ajaero stated, “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 inclusive economic growth and national development instead of this spasmodic ad holism 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.
“It will further deepen poverty as production capacities dip, more jobs lost with multidimensional negative effects. In light of this, we urge the government to immediately reverse this rate hike as previous increases did not produce any good results. People only got poorer.
“But more fundamentally, the government should be bold enough to tell Nigerians in advance the destination it wants to take the country.”
The Organised Private Sector also condemned the development. The Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, said the hike would further drive up the cost of production for manufacturers.
He said, “The second increase in one month will send high costs across the value chain for the manufacturer. In terms of the distribution of our products, it means that we are going to pay much higher for it and this will of course impact the prices at which our locally produced items will go.”
The MAN DG said the PMS price hike does not bode well for the average Nigerian whose disposable income shrinks daily, resulting in fewer purchases but facing increasing transportation costs.
“Together with the fact that the disposable income of the average Nigerian has dropped, we are likely to witness a further dip in our sales figures,” Ajayi-Kadir said. “For some small and medium scale enterprises that use diesel in their processes, it is going to be an increase in costs.
“Additionally, workers who make trips are likely to request another raise to allow them to transport themselves to work. Since people will spend more on transport, it reduces the money they spend on other goods, whereas we need more purchases to support more production.”
The MAN DG noted the NNPC’s new PMS price could lead to another low in the business environment, but hoped that over time there would be a moderation in PMS prices as he recommended the Federal Government incentivise petrol cost reduction.
He added, “We already have a huge advantage in Dangote Refinery coming on stream and doing the local supply. It is a welcome development and we are very proud of that as an indigenous producer in our history.
“We are looking forward to how the government would deliberately incentivise the reduction of the cost of petrol. When we subsidised imported petrol, we could say we were subsidising consumption.
“But if arrangements could be made so that Dangote, for instance, would get crude at reduced costs, it could be a way of giving subsidy to Nigerians, but you would be subsidising production, which would be for the overall well-being of Nigerians.
“So, I believe that kind of arrangement, particularly if we intentionally and diligently increase our oil production, would be something that may have to be considered as we continue to find solutions to the rising costs of petroleum products collectively.”
The Director, the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, described the latest increase in PMS price as regrettably ill-timed and failed to reckon with the prevailing difficult economic conditions.
“There is always a place for political economy in the interest of the vulnerable segments of society,” Yusuf said. “The Nigerian economy is not ripe for full-blown deregulation and market principles on all fronts.”
Yusuf recommended policy sequencing as a better path, noting it would have been better if the Economic Stabilisation Bill expected to bring relief to the citizens and businesses through its proposed mitigating measures was activated and gained traction before a petrol price hike.
He added, “What the economy needs at this time are measures to ease the current economic and social challenges; not policies that would aggravate them. It is desirable to urgently cut import duties and taxes by a minimum of 25 per cent on all industrial raw materials, 18-seater passenger buses and above and cars of 2,000cc engine capacity and below.”
Yusuf remarked, “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 the welfare function for citizens and the productivity function for businesses. The government should not be too fixated on revenue maximisation.”
Reacting to the latest hike, the National President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said the association was troubled by the lack of prior notice.
He said, “While we understand the complex factors that can influence fuel prices, such as global oil market dynamics and exchange rate fluctuations, we are troubled by the lack of prior notice and clear explanations provided by the government and the NNPCL regarding this development.
“The timing of this price hike is particularly concerning, as it has the potential to further exacerbate the impact on businesses and consumers, especially the vulnerable segments of the population and those on fixed incomes, who are still adjusting to the recent increase in the national minimum wage.”
He noted that the current administration should realise that a steep price hike was bound to trigger widespread price increases, potentially reversing the recent easing in inflation.
He posited, “The immediate impact of the hike in petrol price on businesses will be severe, with fuel prices affecting supply and logistics, power generation, transportation, and factory operations.
“The cost of doing business will skyrocket, prices of goods will rise, and some firms may shut down due to low demand in the face of weakening consumer purchasing power. Of course, this will be followed by job losses.”
In a similar vein, the National Vice President, of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, said it was shocking to see pump prices go up again.
“What we’re expecting, to be honest, is a possible drop in the price of PMS due to the expectation that PMS will now be sourcing from Dangote, who would be receiving crude in naira from NNPC. It was, therefore, a surprise to see prices going up again,” he said.
“Well, there is nothing that the government or people will not have explanations for, but I believe that courtesy demands either NNPC as an agent of the government or the government itself should take the time to explain these things to the people. They should give us information on what’s about to happen so that we can have a correct understanding and prepare ourselves for it, but you won’t hear anything.
“All you see is an upward review in prices, and they leave you guessing what exactly is happening. For instance, the information I gathered was that NNPC had been acting as a go-between for Dangote and marketers and paying some amount of subsidy, which accounts for the price difference between what NNPC sells and what other marketers sell. Now, NNPC has withdrawn, and it’s like everyone has to buy and sell what they buy, whether they are buying locally or importing.
“Even if that’s the case, someone should have taken the time to explain it to us, so we have a clear understanding and aren’t just guessing. Of course, this increase translates to higher costs for micro, small, and medium enterprises. It leads to an increase in prices, reduced sales, reduced profits, and ultimately, it can lead to job losses and increased unemployment. Well, we can only hope that this action will bring an end to sporadic fuel price increases and engender some level of stability.”
Additionally, an economist and investment specialist, Vincent Nwani, noted the frequency of fuel price increases this year, emphasizing its nationwide repercussions.
“This is the third time fuel prices have increased this year, which I believe is a nationwide problem. In some parts of the country, prices are above N1,500. Inflation will rise, not just the one reported by the Central Bank of Nigeria.
“Costs continue to climb, and I’m uncertain about the figures from the Nigeria Bureau of Statistics. Electricity costs are also unfavourable, and recently, it was announced that the price of driving licenses will increase.”
The Punch
