“Which way Nigeria? Which way to go? I love my fatherland and I want to know which way Nigeria is heading to!”
Just like the beautiful song of late Evangelist Sunny Okosun in the early 80s, where he pointed out the plight of Nigerians despite the rich human and natural resources which have been given to the country, Nigerians still suffer for a gift that is supposed to be a blessing to the masses.
Dr. Emmanuel Ibe Kachikwu, the Minister of State for Petroleum, made an announcement on Wednesday, May 11, 2016, that premium motor spirit (PMS) will be sold at N145/per liter. This was considered a necessary removal of the petrol subsidy in order to solve the persistent fuel scarcity and difficulties in the country. But then, with the latest move by the Federal Government, will that put an end to the nation’s biggest headache?
It was expected that the present government would listen to the cry of Nigerians and implement the “change” attitude being propagated during Buhari’s presidential campaign. However, the less privileged Nigerians will have to cope with the increasing nature of the fuel price, which will certainly have a slight effect in the price of goods and services; something which won’t be too easy for them.
Besides, fuel has become an essential commodity, its used in almost every home, and in excess because of the epileptic nature of electricity supply in the country. Ordinarily, even when the PMS was sold for N86.50 per liter, Nigerians were struggling, and yes many obtained their petrol in large yellow containers on the black market, but at least some were able to obtain fuel at the standard price. Should there not be a greater focus on refining our own fuel to so that prices can remain at a certain quota?
Economically, it sounds absurd that the new PMS price at N145 would be such a staggering expense for people, but sadly, it is.
Realistically, those at the corridors of power are always not as affected by this change in price because they usually don’t pay for this product as it is wrapped into the budgeting of their position.
Below is the Minister of State for Petroleum, Dr. Ibe Kachikwu’s Press Statement on the current fuel situation in Nigeria
We have just finished a meeting of various stakeholders presided over by His Excellency, the Vice President of the Federal Republic of Nigeria.
The meeting had in attendance the Leadership of the Senate, House of Representatives, Governors Forum, and Labor Unions (NLC, TUC, NUPENG, and PENGASSAN).
The meeting reviewed:
1. The current fuel scarcity and supply difficulties in the country.
2. The exorbitant prices being paid by Nigerians for the product. These prices range on the average from N150 to N250 per liter currently.
3. The meeting also noted that the main reason for the current problem is the inability of importers of petroleum products to source foreign exchange at the official rate due to the massive decline of foreign exchange earnings of the federal government. As a result, private marketers have been unable to meet their approximate 50% portion of total national supply of PMS.
Following a detailed presentation by the Honorable Minister of State for Petroleum Resources, it has now become obvious that the only option and course of action now open to the government is to take the following decisions:
1. In order to increase and stabilize the supply of the product, any Nigerian entity is now free to import the product, subject to existing quality specifications and other guidelines issued by Regulatory Agencies.
2. All Oil Marketers will be allowed to import PMS on the basis of FOREX procured from secondary sources and accordingly PPPRA template will reflect this in the pricing of the product.
Pursuant to this, PPPRA has informed me that it will be announcing a new price band effective today, 11th May, 2016 and that the new price for PMS will not be above N145 per liter.
We expect that this new policy will lead to improved supply and competition and eventually drive down pump prices, as we have experienced with diesel. In addition, this will also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector. It will also prevent diversion of petroleum products and set a stable environment for the downstream sector in Nigeria.
We share the pains of Nigerians but, as we have constantly said, the inherited difficulties of the past and the challenges of the current times imply that we must take difficult decisions on these sorts of critical national issues. Along with this decision, the federal government has in the 2016 budget made an unprecedented social protection provision to cushion the current challenges.
We believe in the long term, that improved supply and competition will drive down prices.
The DPR and PPPRA have been mandated to ensure strict regulatory compliance including dealing decisively with anyone involved in hoarding petroleum products.
The average Nigerian will not be able to foot the new PMS price, removing the subsidy at this time will further breed corruption especially on the black market, although the idea of easing the plight of Nigerians may be good in theory, in action it seems, specifically at this time, highly unlikely.