IT first came as subsidy removal, which was done 10 times under the Olusegun Obasanjo, then the nomenclature changed to deregulation under Musa Yar’Adua and Jonathan governments. Now, the new name for non-subsidy for domestic consumption of petroleum products by government is ‘price modulation’.

Indeed, in reeling out the terms few weeks ago, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, explained that the rationale behind adoption of price modulation was to navigate the mistakes of the past in the nomenclature given to allowing market forces determine the price of petroleum products.

Speaking in Abuja recently, at an interactive forum, Kachikwu hinted that the cacophony of voices and opposition to subsidy removal may have influenced the adoption of price modulation which will ensure the price of petrol reflects the price of gasoline in the international market as closely as possible.
While revealing that the price of petrol would not be allowed to go beyond N97 per litre at every point in time at least for the foreseeable future, Kachikwu stressed that price would be reviewed quarterly to ensure it reflects crude oil prices at the international market.

“It will no longer be something that is fixed at a particular price. We will be looking at the prices of crude once a quarter to see how close to the prevailing prices are and also making sure we do not pass the price of N97 per litre,” he said.

While offering more explanations on why government supplanted subsidy removal with price modulation, Kachikwu insisted that modulation is meant to reduce the amount of money government pays on subsidy.

But the National President of Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Okoronkwo, explained that what drives unstable prices of petrol is inadequate supply to the market.

Okoronkwo also said the association would not want to be dragged into what nomenclature is best suited for the governance process of the downstream sector.

His explanation: “The price being sold above the regulated prices in some states of the federation is caused by lack of adequate supply. But with the increased supply by the Nigerian National Petroleum Corporation, we believe that within a matter of weeks, marketers will be cajoling motorists to patronize them.”

He continued, “on the price modulation and other grammar that is being used in the system, we do not want to be dragged into that aspect. We are businessmen and are not grammarians. What we want is product availability. Because once there is product, the price will be stable and Nigerians will not be subjected to hardship. They can adopt whatever terms they want in the way and manner the sector is run so far there are products to distribute, the marketers will not have any problems with it.”

With the price of crude oil on the downward slide, the complexion of subsidy removal may no longer be a matter of upward in price. While the forecast is that the price of crude is unlikely to rise above 50 dollars, price modulation mechanism may well be within N87 and N97 per litre.

The implication is that whether it is subsidy removal, deregulation or price modulation that is adopted at this time, the price of petrol is likely to remain below N100 per litre in the next one year.

The President of Nigeria Labour Congress (NLC), Ayuba Wabba, said labour would oppose the adoption of price modulation, saying it is a disguise for removal of subsidy.

Immediate past General Secretary of NLC, John Odah, charged NLC not to allow the adoption of different nomenclature to blindfold the decades of anti-movement against subsidy removal.

Odah added: “I would be surprised if the NLC allowed the current efforts to blindfold Nigerians to go on without exposing this price modulation gimmick for what it is. The President had emphatically made it clear in his last visit to the United States that he does not believe there is any subsidy and that all those claiming there is subsidy are being fraudulent in the use of figures. He also made the point that he believes that if the price of fuel were increased, majority of Nigerians would not be able to afford to live.”

Meanwhile, claims by the Federal Government that it is not removing subsidy and at the same time not making provision for subsidy in the 2016 budget ares already causing panic amongst marketers, who fear that government would owe them for a long period of time if the price of gasoline skyrocketed in the international market.

A marketer who spoke on the condition of anonymity said: “The absence of a policy direction about the thinking of government is unsettling the market. Government claimed that it is not removing subsidy, but did not make provision for it in the 2016 budget and also said it is adopting price modulation. Government should come out in plain language to tell all Nigerians as well as marketers what its plans are. The way things are now; there is suspense in the system. We need government to tell us what its direction is. What we have now seems to be speaking from both sides of the mouth and that is not good for the system.”

But Odah urged caution on the non-provision of subsidy in the 2016 budget saying, “we know that the President can submit supplementary budget to cover what they have deliberately refused to put there.”

With the NLC and Trade Union Congress (TUC) holding their National Executive Council (NEC) meetings later this month and with the first adjustment in the price of petrol slated for the end of March, industrial peace is likely to endure, as the labour movement is said to be studying the situation until the first phase of the price modulation regime takes shape in the first week of April.