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Why Jonathan, Diezani should be applauded for the reduction in petrol price

By Toluope Sina-Olulana
21 January 2015   |   11:00 pm
FELLOW compatriots, we should leap for joy and scream in excitement, shouldn’t we?  Our dear President Goodluck Jonathan just launched a rocket on an Open Secret mission into our political space. What a great achievement that is – a decision that defies all logic! Surely the President deserves a medal of honour for this 11th…


FELLOW compatriots, we should leap for joy and scream in excitement, shouldn’t we?  Our dear President Goodluck Jonathan just launched a rocket on an Open Secret mission into our political space. What a great achievement that is – a decision that defies all logic! Surely the President deserves a medal of honour for this 11th hour feat.

  “As you may be aware, there has been a lot of volatility in the oil market in the past few months and due to this, the importation prices of our petroleum products have been impacted. Therefore, with the approval and directive of Mr. President and by virtue of Section 6 clause 1 of the Nigerian Petroleum Act, it is my responsibility as Minister of Petroleum Resources to hereby announce a reduction in the pump price of Petroleum Motor Spirit (Petrol) from the current ninety seven Naira (N97) per litre pump price down to eighty seven Naira (N87) per litre pump price, effective from twelve (12) midnight Sunday, 18th of January 2015.

  “Accordingly, I have directed the PPPRA and the Department of Petroleum Resources (DPR) to ensure strict compliance with this price adjustment by all marketing companies. It is my hope that all Nigerians will benefit from this adjustment.” 

  This announcement was made by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke on Sunday, 18th of January 2015. Aren’t you excited? Well, I am not – sadly. 

  Nigeria is Africa’s largest oil producer at an estimated daily production of 2.4 million barrels of crude oil but still imports refined petrol owing to inoperative refineries and lack of the political will to build at least a new one.  If it were possible, the president would have made frantic efforts to build one as a campaign strategy ahead of the presidential polls, unfortunately Rome was not built in a day.

  When I received the news of the reduction in petrol, I was least excited about the 10.3% reduction since it is only logical to have a slash in pump price following a global slump in crude oil price.  It is obvious even to the dumb that this is a strategic move by Jonathan to curry favour with the citizenry ahead of the 2015 polls. Maybe it would have made a lot of economic sense to me if the president had slashed the price of Petroleum Motor Spirit from 97 back to N65 or less.

  Countries such as Tanzania, Zambia reduced their pump price by more than 15 per cent, how can a country acclaimed as one of the largest exporters of crude oil slash her price by a meagre 10.3 per cent.  

  Between 2007 till date fuel pump price has been changed four times, owing to dwindling oil price in the international market.  See the timeline: 

  Chief Olusegun Obasanjo – May 27, 2007: N65 to N75, The late Umaru Yar’ Adua -June, 2007: back to N65 (price drops). Dr. Goodluck Jonathan – Jan 1, 2012: N141 (later reduced to N97 on January 17, 2012) following widespread protests by Nigerians tagged #OccupyNigeria. Dr. Goodluck Jonathan – Jan 18, 2015: N97 reduced to N87. 

  Twenty four hours after the recent slash in prices, I took time to go around some petrol filling stations in the Lagos metropolis, not one station I visited sold for N87. This situation is pathetic, to say the least. 

  We live in a country where our leaders have to be coerced and threatened with mass protest and strikes before they meet the demands of the masses. Must we carry placards before we are listened to and our demands met? Do we need another round of protests to get the pump price changes implemented? 

  Whilst wondering how this reduction translates into some relief to motorists and its impact on transportation fares and the standard of living of Nigerians, curiosity led me to engage a commercial bus driver in a conversation. Mr. Agbonifo (not real names), a danfo driver in Lagos, expressed his anger with respect to the slash.

  “Which yeye reduction? How much be N10 wey dem comot? We are not going to reduce transport fare o, because we sabi say na because dem won win election na why dem reduce wetin we don dey beg dem to reduce since last year. Shey na today dem just see say crude oilye price fall” 

  With the majority of Nigerians living on less than $2 per day, the N10 (10.3 per cent) cut in PMS price in my opinion does not add up. When crude oil was at $100 per barrel; landing cost of Petroleum Motor Spirit was N125 a litre without subsidy. Oil price is about $44 per barrel now without subsidy the landing cost is about N65 per litre. 

  At the last count, a dollar now sells for N188 from N165.The value of the Naira is gradually being eroded, how long shall those at the helm of affairs feed us with lies while we stand aside and look?  Will the N87 per litre fuel pump price change remain even until after the elections or further drop sometime in the unforeseeable future when we return to N65 or less for a litre of petrol? Is this a political move  by the incumbent president  to endear the hearts of Nigerians to himself in view of the next month’s Presidential Elections or it is simply a sympathetic move by a caring president to alleviate the suffering of the masses? Time will tell. 

  Here is the catch: Jonathan reduces the price of PMS, pays condolence visit to Boko Haram troubled state – Maiduguri. Do we need to hold elections yearly to get things right in our nation? Why is he making last minute panicky decisions or can we regard these events as sheer coincidences?

  But for the agitations from citizens and the strong lash from the opposition party (APC) the president would not have slashed the price but wait for Nigerians to protest as it is the custom in our country. However, the selfish ambition to stay glued to the presidential seat motivated him to change the price over night arriving at an unexplainable N10 reduction. 

  As fair as it may appear, I fear greatly that the reduction may not benefit the masses as such, the culture in Nigeria is when prices go up; they rarely come down. Neither Jonathan nor Madueke deserves applause but rounds of constructive criticisms.

  Let me reiterate that the N10 slash in PMS price is too small compared to the continuous fall in price of crude oil in the international market and the percentage slash of PMS by countries not as economically capable as Nigeria. What we need to demand as citizens from the president is a further reduction to N65 or less; only in this way can we really feel the impact of the reduction. 

It will also do us a world of good as a nation to have a functioning refinery in place. This is my song!

• Sina-Olulana is of the Nigerian Institute Journalism, Ogba, Lagos.